Filing for Bankruptcy to Avoid Vehicle Repossession
Can Bankruptcy Stop the Repossession of a Vehicle? Depending on what type of vehicle you have, there are several different ways to stop the repossession of your vehicle. Some of these methods involve refinancing your loan, reaffirming your loan, and ensuring that your payments are adequate. Reaffirming a Vehicle Loan Generally, auto lenders want borrowers to reaffirm their car loan when they file for bankruptcy. This is to ensure that they refrain from repossessing the car. However, there are some pitfalls to reaffirming a vehicle loan. For instance, you could end up paying a higher interest rate. In addition, you may not be able to build a positive credit rating after bankruptcy. Before reaffirming your car loan, make sure you can afford the monthly payments. You will also want to ask the lender to lower your interest rate. You can even reduce your principal balance. This will reduce your late fees and will make your loan more affordable. Some states prohibit repossession based on a b...