When a financial crisis hits, it can affect all aspects of a person’s life. Not only might it be difficult or impossible to keep up with credit card payments and make ends meet at home, a person having money problems might fall behind on auto loan payments as well. Some Tennessee residents are able to get things back on track by adjusting their spending habits or finding ways to generate more income. In a more dire situation, a car repossession might take place or the person in question might determine it best to file for bankruptcy.
The two issues often intersect
If a person’s car is repossessed, it goes on his or her credit report. The same is true when someone files for bankruptcy. Any money still owed to the lender after vehicle repossession is known as a deficiency balance, and it is sometimes eligible for discharge under bankruptcy. It is helpful to learn more about such options, especially if a vehicle was repossessed before a petition for bankruptcy was filed.
Bankruptcy can also stop creditors from calling
Trying to overcome financial problems is stressful enough without having to field phone calls from collection agencies and creditors every day. Another advantage to filing for bankruptcy is that it typically activates a stay against collections. This brings a halt to any and all attempts to collect a debt.
Is it possible to buy another car while bankruptcy is in progress?
The court must grant permission to apply for a new car loan during bankruptcy. It can be difficult to find a lender if a vehicle repossession is less than 12 months old. However, there are certain types of programs that offer buy here/pay here options for which some people might qualify. Anyone with questions about car repossession as it relates to bankruptcy can ask an attorney who is well-versed in this area of law to review his or her case.