If you’re behind on your car payments and don’t have the ability to get current, Chapter 7 bankruptcy probably won’t prevent the creditor from repossessing the car. While your bankruptcy filing will initially stop any repossession, the lender can ask the court to lift the automatic stay. And if you are behind on your payments, most courts will lift the stay to let the lender proceed repossess the car.
Then, if you want to keep the car, you’ll need to reinstate the loan outside of bankruptcy, by paying for the missed payments and fees and by resuming your regular payments.
If your lender has already accelerated the loan (declared the entire balance due) and won’t let you reinstate it, you can always file for Chapter 13 bankruptcy. Chapter 13 will allow you to make up the missed payments as long as you also make the regular payments called for under your original agreement.
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