Filing for bankruptcy can potentially stop the repossession of your vehicle in some circumstances. Still, it is not a guarantee, and the specific details of your situation will determine whether or not it is effective. So let’s dive in a little further.

The most common way to stop the repossession of a vehicle is using a Chapter 13 bankruptcy. This allows you to stop the repossession of a vehicle or get a vehicle back that has been repossessed. You then can get caught back on the amount past due on the vehicle over a three to five-year period.

When you file for bankruptcy, an automatic stay goes into effect. This is a court order that temporarily stops most collection actions, including repossession, against you. The automatic stay remains in effect until the bankruptcy case is closed, dismissed, or until the court lifts the stay.

However, the automatic stay does not apply to all collection actions, and it may not always stop the repossession of your vehicle. For example, the automatic stay may not apply if:

• You have already lost your vehicle through repossession before you filed for bankruptcy (and the vehicle was sold at auction)
• The creditor has obtained a court order allowing them to repossess your vehicle before you filed for bankruptcy
• You have given the creditor a “voluntary surrender” of your vehicle, which means you have agreed to give up ownership of the vehicle without going through the repossession process

Even if the automatic stay does apply to the repossession of your vehicle, the creditor may be able to ask the court to lift the stay and allow the repossession to proceed. This is more likely to happen if:

• You are not current on your Chapter 13 bankruptcy payments
• You do not have a good reason for falling behind on your Chapter 13 payments
• The vehicle is not necessary for you to successfully complete your Chapter 13 bankruptcy

If the creditor is able to persuade the court to lift the stay, the repossession of your vehicle may be able to proceed.

Before making a decision about bankruptcy, it is a good idea to speak with a bankruptcy attorney or a credit counselor to get more information about your options and the potential consequences. They can help you understand the pros and cons of bankruptcy and help you determine whether it is the right choice for you.

In summary, bankruptcy may be able to stop the repossession of your vehicle in some cases, but it is not a guarantee, and the specific circumstances of your situation will determine whether or not it is effective. It is essential to carefully consider your options and seek the advice of a qualified bankruptcy attorney before making a decision about whether to file for bankruptcy.