Is it possible to set up a payment plan in order to prevent repossession on my vehicle? 24 Answers as of March 05, 2012

You may be able to reaffirm it. Contact a local attorney for specifics.

Yes, that is what a Chapter 13 bankruptcy is.

You can set up what is call a reaffirmation agreement which would prevent your vehicle from being repossessed.

A chapter 13 plan can provide for payment of a secured debt, such as a car loan.

Typically, a chapter 13 is filed to protect a vehicle since you can pay for the vehicle through the chapter 13 plan.

Can be done with a Chapter 13, or you could try to work directly with the lender.

Yes, it is possible to file a chapter 13 bankruptcy and set up a payment plan to pay out your vehicle over time. In fact, if your vehicle is worth less than what you owe, and you've owned it for more than 2.5 years, you may be able to only have to pay what it is worth in full, with some interest, and the rest of the money is only paid a fraction of what you owe, so your payments are greatly reduced. You should consult an attorney that is experienced in chapter 13 cases to do this. Alternatively, if you file chapter 7 bankruptcy, and you have a fairly new car that is worth less than what you owe, you may want to consider a redemption of the vehicle, to pay a lump sum. There are some companies that will consider financing a redemption for you, to essentially refinance the car for you. Their interest rates are high, but sometimes they can still save you a lot of money on the car, and allow you to keep it. Again, seek experienced bankruptcy counsel.

A Chapter 7 case will stop a repossession only temporarily. The only way to avoid a repossession in this case is to bring yourself current before the case ends or redeem the vehicle with a replacement loan. A Chapter 13 case, however, would indeed prevent repossession as long as you continue to pay according to a plan. In the end, it depends on your peculiar financial situation and requires a free consultation with a qualified bankruptcy attorney.

Filing bankruptcy will stop the repossession of your vehicle temporarily. The debt owed on that vehicle will also be discharged. HOWEVER, the lender still holds a lien against that vehicle even after your bankruptcy discharge. This means they have a right to enforce that lien. So, unless you work out a payment plan, or immediately get current on your car loan, they will eventually be able to repossess the vehicle. If you cannot afford the payments, give the car back and go get one that you can afford. This is especially important if you owe more on your current car than it is worth.

Chapter 13 bankruptcy allows a debtor to stop repossession and pay off arrearage over time.