How To Stop Car Repossession In Florida

Repossession of a vehicle is an unfortunate situation too many people suffer.  If a borrower fails to make timely payments for a car loan the lender may begin the repossession process. See Florida Statute 537.012. For many, cars are essential for getting to and from work, school and repossession can have devastating consequences. Moreover, missed payments can lead to the bank initiating repossession without even providing notice to the borrower.

Fortunately, there are options and rights for borrowers to stop car repossessions in Florida. If you received threats of a repossession, contact a bankruptcy attorney for legal advice without delay. An experienced Tampa bankruptcy attorney may be able to prevent the car from being repossessed and eliminate late fees and penalties.

How to Stop a Car Repossession Quickly

If you have defaulted on a car loan, the lender usually can have the car repossessed without notifying the owner. See Florida repossession laws. Borrowers at risk of a car repo need help right away. For many borrowers facing a car repo, the automatic stay protection is the answer. The automatic stay forces creditors to stop all collections attempts against you. As soon as the bankruptcy is filed an automatic stay instantly goes into effect. Under the stay, creditors cannot call you, continue with a lawsuit, repossess, or foreclose on your property. Regardless, how many months late payments are or how high the outstanding balance is, repossession will be stopped

In car repo cases, timing is everything. If you may soon default on a car loan, it’s important to speak with a Tampa bankruptcy lawyer before your car is repossessed. If you wait too long the automatic stay may not be able to help. The automatic stay only prevents the bank from taking the car, it will not force them to return a car they already had prior to the case being filed.

Stop a Car Repossession with Bankruptcy

The automatic stay will stop all collection activity as soon as the bankruptcy is filed, but it is not intended to be a long-term solution. Borrowers will need to consider whether they should file for Chapter 7 or Chapter 13. Each form of bankruptcy will have its own unique benefits and disadvantages. The type of bankruptcy you choose will greatly impact your ability to keep the car or discharge the balance owed. If you think bankruptcy may be a solution, schedule a consultation with a bankruptcy attorney to learn more.

Payment Plan to Stop Car Repossession

Chapter 13 is the most common option for borrowers seeking to stop car repossession.  Chapter 13 provides car owners with up to 5 years to pay off the car loan. In many cases, 5 years is enough the time for the owner to catch up the payments. Additionally, by spreading the payments over a new 60-month loan it helps reduce monthly payments. The 60-month loan is a vital tool borrowers can use to permanently stop the car repo and make the loan affordable.  Most of the time, the interest rate applied is around 6%.  In some cases, this will allow borrowers to save money on interest as well.

How to Wipe Out Car Loan

If you do not want to keep the car, you can surrender the vehicle and discharge the debt. Simply walking away from the automobile is not a good solution. The balance will often be thousands of dollars more due to legal fees, interest, and late penalties. If the car repo auction does not provide enough money to pay the full loan, the bank can garnish wages and place liens on your property for the remaining balance.

On the other hand, if a debt is discharged in bankruptcy the borrower will be released from all personal liability on the debt. See bankruptcy law 11 U.S.C § 727. Further, the discharge prohibits a creditor from taking any collection action against the borrower. Bankruptcy is designed to give borrowers a fresh start, not be burdened with debt from cars they no longer own.

Lien Strip a Car in Chapter 13 (Cram Down)

A cramdown in bankruptcy will allow you to keep the car and shave thousands of dollars off the loan. With a cramdown, the borrower keeps the car and will only owe the car’s market value, not the loan balance. Thus, if your loan exceeds the car’s value you may get a windfall and save thousands of dollars. For instance, if your car is worth $5,000 but you owe $9,000, you would save $4,000 (9,000 – 5,000) and get to keep the car! To be eligible, the borrower mush have purchased the car at least 910 days (roughly 2.5 years) prior to the filing date of the Chapter 13 bankruptcy petition. See bankruptcy law 11 US 1325.

How to Lien Strip a Car in Chapter 7

Chapter 7 has traditionally been the option for surrendering a car in jeopardy of repossession. However, section 11 U.S.C. 722 of the bankruptcy code allows what is called a “redeeming” of the car- essentially, a new loan that pays just the value of the vehicle (like the cram down in Chapter 13), rather than the outstanding loan balance. Moreover, in Chapter 7 there is no  910 rule, so you won’t need to wait 2.5 years to use this option. For instance, if you only owned the vehicle for one year, you may still be eligible for reducing the car loan.

Consult a Tampa Bankruptcy Law Firm

If you are at risk of losing your vehicle to repossession contact Florida Law Advisers to speak with a bankruptcy lawyer.  We are a customer service-oriented bankruptcy law firm committed to providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are available. To speak with a bankruptcy lawyer in Tampa now or schedule a free consultation call us today at 800 990 7763.


Frequently Asked Questions

Will bankruptcy stop a car repossession?
How does Chapter 13 prevent a car repossession?
How long does the automatic stay last?
What is the fastest way to stop a car repossession?
Can I stop a car repo with a payment plan?
Can a bank repo my car without notice?
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22 replies
  1. Charles F.
    Charles F. says:

    Victim of loan fraud by dealership. (T.I.L.) Saddled with a lease payment that is $115.00 per month higher than disclosed. Dealer manufactured a down payment loan of $4,000.00 without proper disclosure or permission. Credit application and other documents modified by dealer apparently to cover process after I took possession of a Toyota lease car. Disabled, SSI only at $500.00/mo, reside in county-subsidized Section-8 accommodation. The lease payments are almost exactly monthly income. No room for rent, car insurance, gas or life in general. How can any lender approve this file? Appealed to both lenders who state that it is not their concern. They rubber stamp anything directly from Toyota without checking file. Can not afford this and wish to pursue. CFPB and other watchdog agencies are like a toothless grandmother. If the other party refuses to reply or disagrees, the issue ends.

    Reply
  2. Richard B.
    Richard B. says:

    I have offered my auto lender payment and they have refused And they have refused to work with me To get the account satisfied Now they are telling be my vehicle is up for repossession they are calling my family friends My parents my grandparents everybody please help me with this matter

    Reply
  3. Tip D.
    Tip D. says:

    I had a lender retitle a car in my name. The lender refused to produce a loan contract to me and said it was an oral agreement (with my boyfriend who was gone). The car was at a body shop getting work done and the lender had to car ‘repossessed’. And the body shop was never paid off for the work. Is there any action I can take to get the car back?

    Reply
  4. Trina
    Trina says:

    I was rear ended on 2/14 while traveling from one client to another. Long story short I now have a PIP lawyer and a worker’s comp lawyer for my lost wages. My job has denied my claim so have 0 income since. Behind 2 payments on car and their saying they sent me a RTC that I never received. Now saying car will go for review this Friday for repo, do I have any options

    Reply
  5. Audrey
    Audrey says:

    Currently on unpaid maternity leave and 36 weeks pregnant. I have a title loan on my car. I have told the loan company that I’m facing hardships and couldn’t make payments until I go back to work. They seem unwillingly to work with me and every time i talk to them, they tell me if I don’t make a payment right then and there, they will repossess the car. There’s only $700 left on the loan. Is there anything I can do or help I can get?

    Reply
  6. Emmeline
    Emmeline says:

    I’m looking to get my car repo I’m moved to another state I have email the dealership which was a buy here pay here. They don’t reply to my emails. I don’t wanna be charge with a stolen vehicle . What do I do ? How much will you charge me ?

    Reply
  7. Andrea
    Andrea says:

    Hi there, my grandmother took out a car for my uncle who passed away. She has defaulted on July payment and now they have repo the car a week and a half after july due date. They are saying she owes more months but it’s not true and now they changed their story saying she owe this and next month which statement is not even out. the car is a lease, is there anything we can do to get the car back?

    Reply
  8. Penny
    Penny says:

    Is there help available for a handicapped person to get a repossessed car back? They have no money, family assistance is exhausted. He is a triple amputee and needs the car to transport his power chair to anywhere he needs to go. His carrier was taken along with the car. They have struggled to hold on to the car and made partial payments weekly until the last couple of weeks.

    Reply
  9. DENNIS P.
    DENNIS P. says:

    I have my car with a finance company Honda financial based out of Georgia, i took out a loan against the car cause I have lots of equity in it. Honda financial sent me a letter saying they will repossess my car if I don’t settle the lien immediately that according to contract I can not take a second lien and that gives them right to repossess. I called the the company I took a the lien out with and they said that FLORIDA law does not permit them to repossess and actually we are allowed to have up to 3 liens on auto. Florida law erases the contract. is this true? should I worry? should i pay car off?

    Reply

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