Lawyer for Reducing Car Payments & Avoiding Vehicle Repossession in St. Clair Shores

Legal Assistance for Clients throughout Macomb, Wayne, St Clair & Sanilac Counties

Falling behind on your auto loan can put you in jeopardy of vehicle repossession. This may be just another debt that you are unable to keep up with if you have descended into insolvency. Losing your car can put you in serious straits, leaving you without transportation, unable to get to work, school, or anywhere else. 

At Joseph L. Grima & Associates P.C., we understand how stressful such a situation can be. Our firm is here to help you resolve such challenging and worrisome problems. With 30 years of experience helping clients throughout the area with debt relief, we know what we are talking about. We have helped thousands of individuals since 1991 to successfully turn their financial scenes around and regain control.

Facing the prospect of losing your car? Reach out to our firm to arrange for a free consultation with our St. Clair Shores attorney. Contact us online or at (313) 385-4076.

How Chapter 13 Bankruptcy Can Help

Filing for a Chapter 13 bankruptcy gives you benefits related to your vehicle, whether it is being threatened with repossession or has already been repossessed. Once you file your bankruptcy petition, the court will issue an “automatic stay” that prohibits your creditors from further pursuing payment or collection. Once this happens, your lender cannot repossess your car. 

After repossession, you have 10 days to file for bankruptcy before your car lender can legally sell your vehicle. In some instances, it may be possible to regain possession of your car if it was repossessed within that short window of 10 days. Once you have filed for a Chapter 13, you will be reorganizing your debt into one monthly payment made to your creditors through your repayment plan under the supervision of the court. This means you can pay the past-due auto payments through that plan while you continue to keep up with your regular payments. You must stay current with your bankruptcy plan payments and with your car payments to avoid future repossession. 

Reducing the Payments on Your Vehicle Loan

This may be available to you through what is termed a “cramdown.” In this scenario, your vehicle’s resale value has depreciated to an amount less that what you owe. This may allow you to reduce what you owe to what the value of your vehicle has become. For example, if your original auto loan was for $25,000 and you now owe $18,000 but the current value of your car has sunk to $10,000, you may be able to “cramdown” your balance to $10,000. The remainder of what you owe -- $8,000 – will be discharged when your bankruptcy case is concluded. Cramdowns also give you to opportunity to lower the interest rate on auto loans as well. 

The only caveat to the above scenario is that you must have bought your vehicle at least 910 days prior to filing for bankruptcy.