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Avoiding Repossession in Oklahoma through Bankruptcy

avoiding-repossion-bankruptcy-oklahoma-cityOklahoma City Bankruptcy Attorneys Helping Stop Home Foreclosures
Oklahoma City Debt Relief Attorneys Helping Oklahomans Avoid Automobile Repossession
Many people worry about losing their homes, vehicles or other personal property if they file bankruptcy. In fact, bankruptcy can help you avoid car repossession. We help clients avoid embarrassing repossessions by advising them on their debt relief choices and helping them file bankruptcy, if necessary. Timing is key to the choices available to you. If your car has not yet been repossessed this is a good thing. You have more options available to you. Generally, to get a car back once it has been repossessed you are going to be limited to a Chapter 13 filing. If your car has not been repossessed you can file a Chapter 7 bankruptcy but will need to have the past due payments caught up by the time the bankruptcy is discharge - usually 3 months after filing. If you get your car payments current your options are as follows:
1. Redemption: If you pay the leanholder the fair market value of the vehicle in a lumpsum payment, you can discharge the remaining debt. This is going to be difficult. . .you will need to have the cash up front an unless you have a relative or friend willing to front you that money, your probably not going to be able to do this one.
2. Voluntary repossession: One way to achieve debt relief is to surrender your car to the lender after you file bankruptcy. This option is available if you are financing or leasing a car. After surrendering the vehicle, the lender can sell it at auction but will not be able to seek from you the difference between the balance of the obligation and the proceeds generated by the auction sale.
3. Reaffirm the debt: Another way to avoid car repossession is to receive a court approved contract that assures you will pay the car loan, despite it being a dischargeable debt. Some companies, such as Ford Motor Credit are very particular about debt reaffirmation. If you do not reaffirm the debt during bankruptcy, and the underlying financing contract contained a provision that defines bankruptcy as an event of default, the lienholder may repossess the vehicle during or after the bankruptcy case, even if you are current on your payments.

Chapter 13 and your Vehicle

This is one area that many people look to doing a Chapter 13 over a Chapter 7. There is a bankruptcy provision that allows a debtor to essentially re-structure an auto loan if you have had the underlying loan for over 2 years. Essentially you will re-work the loan to pay back just what the automobile is worth. This is a particularly good provision for someone who is significantly upside down on their auto but still wants to keep the vehicle if needed for work, etc.


For more information, or to discuss your situation with an experienced Oklahoma City bankruptcy lawyer, contact us today to arrange your initial consultation. Click here for a free bankruptcy evaulation.


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