Vehicle repossessions are unfortunately quite common as many people are still struggling to gain a foothold in the unsure economy. Falling behind on vehicle payments can occur for a variety of reasons, with medical hardship and job loss as two of the biggest contributing factors.
Many people severely misunderstand how bankruptcy really works. It’s commonly thought that if you file for bankruptcy you’ll lose everything you own. Nothing could be further from the truth. The bankruptcy code contains provisions that protect (or exempt) property from your creditors. Exemptions make it possible for individuals to get a fresh start while holding onto their most valued assets.
Relatively new legislation has framed bankruptcy to limit the amount of Chapter 7 bankruptcy filings. This is controlled by restricting Chapter 7 bankruptcy to only people that fall under the median state income, when adjusted for inflation and family size. Individuals above the median household income can only file for Chapter 13 bankruptcy. The new laws further changed Chapter 13’s duration to a compulsory 3-5 year period.
These days it can be a struggle to maintain pace with bills, often to the point of defaulting on an auto loan. Unfortunately, financial institutions usually don’t care about your circumstances - they want your money. If you’re unable to make payment, it may not be long before they send a repo man to knock on your door.