How Repossession Works

Repossession is the action of regaining a possession, usually a financial institution taking back on object that was either used as collateral, rented or leased, for which payment remains due.  If you are facing repossession of your home or car, you may want to consider declaring bankruptcy to save them.

Filing for bankruptcy will temporarily stop any repossession process, which you may be facing.  Even if your items have already been taken from you, your bankruptcy filing may be able to get them back if you act quickly.

If you file a chapter 13 bankruptcy you most likely will be able to keep both your car and home.  If you file a chapter 7 bankruptcy you can probably keep both for a little while, but in the end you will likely have to end up liquidating them.  This all comes down to what state you live in and what the laws say about liquidating assests for bankruptcy.

The chapter 7 bankruptcy is a short term solutions, for saving your property.  Most likely you will have to give it up, but with a bankruptcy discharge, you can start over again and start getting your financial life in order.  With a discharge you won’t have to worry about having any creditors calling you or people harassing you, you will have to use cash though to purchase items for the first few years, you won’t be approved for credit.  It you do get approved for any credit, make sure that you can afford the payments, most of them come with a high interest rate.

If you are advised to file for a chapter 13 bankruptcy you can stop the repossession and foreclosure and hopefully it will save you from losing your home at all.  With chapter 13 you do make arrangements and come up with a financial plan that you submit to your creditors, on how you will pay back the debts you owe them.  During the time frame that you are paying your debt back, creditors are not legally allowed to continue collection efforts or start any new ones.

The main benefit from choosing a chapter 13 over a chapter 7 is to save your home and car(s) from repossession.  Consulting a bankruptcy lawyer in your home state is very advisable here.  They can assist you in figuring out if you would be more qualified for chapter 7 or chapter 13.  They can also help you save your car and home, if the law allows it.

Bankruptcy isn’t always the best solution though, if you have other options for paying your bills and getting your repossessed items back.  If you are in a financial crisis though it may be your only means, for saving your home and car.  If you do declare bankruptcy, you must be able to get your finances back in order so your property doesn’t get repossessed again.  This is because you can only declare bankruptcy every 8 years, so if your facing repossession again, you won’t be able to declare it again, very soon.