Worried About Repossession?
New Jersey Bankruptcy Attorneys Review Best Options to Keep Your Property
In New Jersey, if you fall too far behind in making payments on your house, car or other property, your creditors can repossess that property. This may include not only your home and vehicle but electronics, household appliances and household furniture as well. However, there are ways to stop repossessions, as well as put a stop to harassing phone calls and letters from creditors when you have unmanageable debt. Filing for bankruptcy will immediately end all repossession actions. Additionally, some bankruptcy alternatives, including reaffirmation agreements and/or a mortgage loan modification can also stop a repossession.
Stopping repossessions is one of the many benefits of bankruptcy and bankruptcy alternatives for debt relief. If you have concerns about repossession, a New Jersey bankruptcy lawyer can review your finances and explain your best options.
Can Bankruptcy Stop Repossession Actions?
Filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy petition will immediately stop repossession attempts and stop foreclosure actions. The creditors and lenders trying to claim your property will have to cease all collection efforts and begin anew with the bankruptcy court. Even if these creditors move fast, the automatic stay will give you several months where you can breathe.
In certain cases regarding repossession of a vehicle, it may be possible to get the car back if you act immediately after the repossession. It is always better to speak to bankruptcy attorneys as soon as you realize you are in financial trouble. However, you are not out of options just because you defaulted on a car loan or the car was already repossessed.
How Can Filing Chapter 7 Bankruptcy Protect Your Possessions?
Personal exemptions allow a bankruptcy filer to keep a certain amount of property outside of the bankruptcy estate, and outside of creditors’ reaches. Chapter 7 is a type of bankruptcy that allows debtors to exempt certain property. Both federal law and New Jersey law have bankruptcy exemptions. Filers can pick the exemptions that best work for their situations. These exceptions protect certain amounts and types of property, including home, car, tools and more. If your property is worth less than the allowed exemption, you can stop the repossession and save your asset.
How Can Filing Chapter 13 Protect Your Possessions?
If you are behind on your bills and have a secured asset, Chapter 13 can help. If you can pay the arrears (without interest) within a five-year period and pay the monthly bills still due, then you should be able to save your possessions. Additionally, if you are behind on your mortgage payments, you should be able to save your home. The same idea applies for your car, furniture and any asset that is subject to a security interest. A security interest means the creditor can repossess possessions if you do not pay the loan that financed the property.
Should I Sign a Reaffirmation Agreement?
Reaffirmation Agreements. If your property is worth more than the exemption, you still may have Chapter 7 relief. Chapter 7 allows you to enter into a “reaffirmation agreement.” This agreement allows you keep your property if you continue to pay the debt and the creditor agrees to the arrangement. Further, Chapter 7 bankruptcy allows you to discharge your unsecured debts freeing up money for the asset you really want to keep.
- Case in point 1: You rent your home and have a car worth less than $2,400. No matter what you owe on the car, you can keep the car and discharge the car debt.
- Case in point 2: You rent your home and have a car worth $5,000. You owe the car dealer $7,500. You also have $35,000 in bills for credit cards and medical bills. In Chapter 7, you can discharge the $35,000 in bills. If you have enough money left over (after you pay the rent and living expenses), you can enter into a reaffirmation agreement to pay the car dealer the $7,500 over time and keep the car.
At Garland & Mason, L.L.C. we can explain which personal exemptions apply and how they can be used to protect your assets including your home, car, household furniture and tools of your trade. We can also explain how reaffirmation agreements can work to save your assets.
Can I Get a Mortgage Loan Modification Instead?
Maybe. Some creditors may let you renegotiate the terms of your loan (usually by letting you pay the arrears at the end) or paying the arrears over time before your file for bankruptcy.
What Happens after Repossession Takes Place?
If your asset is repossessed, the property will be scheduled for sale. If the sale does not generate enough funds to pay the debt, the creditor may get a deficiency judgment against you for the balance left after the sale.
I Need a Lawyer for Help with Repossession
For more than 20 years, Gary L. Mason has helped people like you obtain a fresh financial start. We invite prospective clients, who are having financial difficulties, to call Garland & Mason, L.L.C., at (732) 358-2028 or fill out our online bankruptcy contact form.
Our bankruptcy attorneys offer a free initial, confidential consultation. Our Manalapan law firm serves businesses and individuals in Mercer, Monmouth, Ocean, Middlesex and surrounding counties of New Jersey. Additionally, our office is handicap-accessible. It is just 15 minutes from the New Jersey Turnpike and the Garden State Parkway. Parking is free.