Bankruptcy and Car Repossession Claims; What You Should Know
The primary aim of filing for bankruptcy in most if not all instances in the U.S is to stop creditors from auctioning one’s property and taking other measures as wage garnishment to settle debts owed to them. Creditors are allowed under federal law to take action against a debt’s defaulter’s property through auctioning to recover the amounts owed to them. Thus, if one is undergoing financially stressing situations that put them in conflict with their creditor’s terms, the chances are that they would lose their property as a part of the recovery strategy. However, a Chapter 7 bankruptcy claim would be the easiest way to avoid such an instance.
A bankruptcy claim in California serves to effectively stop the actions of the creditor’s against the debtor. The Chapter 7 bankruptcy plan should thus stop creditors from harassing you for their debts through the automatic stay impact that it enforces.
A common question that many residents in Simi Valley and, California in general ask, however, is the impact of the bankruptcy claim on effects such as car lending.
If you are worried about your lender repossessing your car, then you ought to understand the basics of Chapter 7 bankruptcy claim.
In California, the lender would only be able to repossess your car if they obtain permission from California courts to take such an action. Otherwise, the automatic stay created by the filing of a Chapter 7 bankruptcy case is sufficient enough to stop such an action being taken against you as the debtor.
From this scenario, thus, the debtor only has to file for bankruptcy to avoid the actions of the creditor against them. However, the actual situation may be far different from that.
While filing for Chapter 7 bankruptcy may protect your property from creditor action to some extent, the creditors may exploit loopholes in the federal guidelines to frustrate you into repaying your debts despite the automatic stay. As such, one should always make sure that their obligations are secured to benefit from the automatic stay from filing for bankruptcy.