Richmond Vehicle Repossession Attorneys

Chapter 7 Bankruptcy

Chapter 7 bankruptcy can be a relatively fast way to get out from under overwhelming debt, but your non-exempt assets will be liquidated. This means you must proceed carefully to avoid unintentionally losing your vehicle and other potentially non-exempt assets. Depending on your financial circumstances, there may still be a path forward that allows you to keep your car. 

One potential option is reaffirmation, where you sign a new agreement with the lender to continue making your monthly payments. Keep in mind that you will remain responsible for the full debt after your bankruptcy is over, but you get to keep your vehicle on the same terms while working to eliminate other unsecured debts. Reaffirmation may be a viable choice if you have enough income or resources to continue making vehicle payments but not necessarily enough to manage your other debts that can be discharged through Chapter 7, such as medical bills and credit card debt.

However, even with a reaffirmation agreement, you will need to be able to exempt your vehicle equity to avoid liquidation. Virginia allows you to exempt up to $10,000 in vehicle equity. If that isn’t enough, you can use some or all of your wildcard exemption, which is set at $5,000 in value for individual filers. 

If your car's value is less than what you owe, we can also explore redemption, where we can help you pay the lender the car's current fair market value in a single lump sum. This effectively "redeems" the car and allows you to own it free and clear, but it requires access to a significant amount of cash. 

Chapter 13 Bankruptcy

For many people facing repossession, Chapter 13 bankruptcy is a more powerful solution because it offers a structured repayment plan. This is especially helpful if you're behind on your car payments. 

We can create a repayment plan that includes your past-due car payments (as well as your other debts) and spreads them out over a three-to-five-year period. You make one manageable monthly payment to the bankruptcy trustee, who then distributes the funds to your creditors, including your car lender. This plan allows you to catch up on your debt while you continue to make your regular, ongoing car payments. 

A key benefit of this approach is that you generally get to keep your car as long as you make your plan payments on time. Depending on your situation, we also may be able to explore a process called a "cramdown" to reduce the principal balance of your loan to the vehicle's current market value, which can significantly lower your total debt and monthly payments. Our seasoned team at Boleman Law Firm, P.C. can develop a Chapter 13 plan that gives you the best chance to get on top of your debt and keep your vehicle for the long haul.