“Chances are, you rely on your vehicle to get you where you need to go – and when you need to go,” says the Federal Trade Commissions’s website. “But in many states,” the FTC adds, your creditor can seize your vehicle as soon as you default on your loan or lease.”
As a debt consolidation lawyer offering bankruptcy information, I have news for you – Indiana is one of those states. Creditors here have the right of possession of the vehicle immediately upon default of a note. They can even take the car off private property.
It gets worse: Once the car has been repossessed, the creditor has the right to sell it. If the sale doesn’t satisfy the entire debt owned, the lender can still sue the debtor for the difference. In Indiana, if the cash price of the car is $3,200 or less, the creditor can’t both file judgment AND seize the car. Occasionally, lenders may allow the debtor to buy it back by paying the amount owed plus any expenses the creditor had. In fact, one of the kinds of help we offer at each the five Zuckerberg bankruptcy law offices is negotiating with car lenders to try to set up a revised payment plan.
Once a car buyer or lessee starts falling behind on car payments, even if the car has already been repossessed, that’s where Indiana bankruptcy law can come into play. Bankruptcy Chapter 7, for example, can help by freeing up money that had been going towards other debts to be used to repay missed car payments and “redeem” the vehicle. Under Chapter 13 bankruptcy law, by contrast, the missed car payments become part of the three to five year debt repayment plan.
In these Bankruptcy in Indiana articles, I’m always mentioning the automatic stay. In terms of cars, what this means is that once a bankruptcy filing is official, lenders cannot repossess the car. In fact, if a Chapter 13 bankruptcy is filed up to ten days after a repossession, the creditor must give the car back.
After all, one very important form of Indiana bankruptcy help is keeping you in the driver’s seat!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg