Topics Covered:
What is repossession?
How can bankruptcy stop repossession?
What is repossession?
Repossession is a legal process whereby a creditor collects property owned by the Debtor in which the payments have fallen delinquent. Many Debtors are not aware that they have certain statutory rights when facing repossession. In the state of Texas, a Debtor has ten days from the date the property is collected to redeem it by satisfying the outstanding balance owed. If the debtor does not satisfy the balance owed, then the property will liquidated (sold) by the creditor to satisfy their lien. Any remaining balance after the liquidation (sale) is called a deficiency balance. Debtors are still obligated to pay the deficiency balance even after they lose the property. If you are currently facing the threat of repossession or if your property has been recently repossessed, please contact our office immediately so that we can advise you of your legal options. You can fill out our free online evaluation form for more information and advice.
How can bankruptcy stop repossession?
Bankruptcy provides for an automatic stay, which halts all collection efforts including repossession of property. Upon notification of a bankruptcy filing, the creditor is required to stop pursuing collection attempts and instead, comply with the Debtor’s repayment plan under chapter 13. For example, a Debtor who was two months delinquent on a car note where the payments are approx $400.00 per month, could file a Chapter 13 Bankruptcy and pay back the $800.00 delinquency over a three to five year payment plan. The Debtor could also choose to repay their entire car note through the Chapter 13 Bankruptcy if they choose. If the debtor meets the other requirements to make the Chapter 13 Bankruptcy plan successful this can be the difference between a Debtor keeping their property or losing it. If you would like more information on your personal situation please complete our free online evaluation form.