In these tough economic times, we all need help where we can get it. People everywhere are losing
their homes, their cars, sometimes everything and aren’t aware of the laws and how to use them
to their advantage. Are you behind on your car or mortgage payment and have been threatened with
foreclosure? Does the dealership want their car back because of missed payments? Believe it or not,
you do have options.
Chapter 13 bankruptcy may be the answer. And although none of us
ever want to file for bankruptcy, it can be an effective way to get back on your feet. You can use
it to stop foreclosure. And once this is done, you can make up on those missed mortgage
With your car, it works well too. Chapter 13 bankruptcy allows you to refinance your
auto loan. Most people don’t realize that you can pay off what your car is worth, not what you
owe on it. Interest rates can also be re-negotiated. Lenders would much rather receive some payment
than nothing at all. The last thing they want is more bad debt on their balance sheet.
does it work? Your creditors are essentially cut off, once the bankruptcy case is filed. It’s
called an “automatic stay” and it immediately stops your creditors from trying to
collect what you owe them. Creditors cannot repossess your car, foreclose on your house, garnish
your wages, or cut off your utility service or welfare benefits. Most importantly if your car
was purchased more than 910 days ago you only have to pay 90% of the NADA retail value of the car
rather than the actual amount owed on it. This really helps out a lot of folks who may have
traded a car which was upside down and the dealer transferred the negative equity from the trade in
to the newly purchased vehicle. So if your car is worth 5000.00 but you owe 10,000.00 on it you will
generally speaking only have to pay back 5000.00 on it.
This can also work with housesif they have a 2nd mortgage on them. If you owe the 1st mortgage 100,000.00 and the
house is only worth that amount or less based on an appraisal than any 2nd mortgage and that
property can be removed by the bankruptcy court so that you do not have to pay the 2nd mortgage any
longer. This is an important tool to use in today’s environment because the housing
market is so depressed and houses have lost significant value. Lots of people are filing chapter 13 bankruptcy in
Charlotte NC and all across the country to take advantage of this and it would serve you
well to talk to a bankruptcy attorney in your area.