One of the three primary reasons people seek out my firm for help, along with foreclosure and garnishment, is a pending repossession.  Repossession is a legal process whereby, most commonly, a creditor who has lent you money to purchase a vehicle seeks to sell your vehicle to repay the loan after you have become delinquent in loan repayment.  Most commonly, it is a car or truck repossession that people are facing; although, a boat, ATV, RV or any other piece of collateral in which the seller retained a lien can be repossessed.  The "repossession" of a home is called a foreclosure; please see  foreclosure for more information on that topic.

When you borrow money to purchase a vehicle, the creditor has you sign a promissory note and then affixes a lien against your automobile.  The lien secures the promissory note in the event that you fail to pay.  It is this lien that allows the creditor to repossess the vehicle when you fail to pay.  If they did not have the lien, the collateral would be owned by you and they could not repossess the property.  The terms of when a creditor can or will repossess are usually determined by your contract and/or their own business policy. 

One of the major reasons that people file a Chapter 13 reorganization in Arkansas is to stop repossessions.  A Chapter 13 repayment plan allows you to "restructure" your car note over a 36 to 60 month period of time and can help you to stop repossession when you have fallen behind in payments.  When you purchased the vehicle, the creditor set an amount that was being financed and an interest rate and the "amortized" the payment.  Amortization is a mathematical process of determining how much the payment will have to be to pay a certain debt amount at a certain interest rate over a certain period of time.  When you file Chapter 13, typically your vehicle is re-amortized over the length of your bankruptcy or is given its regular payment depending on your Chapter 13 plan length and budgetary needs.  Chapter 7 can stop repossession, but only temporarily and you will normally have to cure the defaulted payments in full in a short period of time to be able to keep the vehicle.

Please note, pursuant to Arkansas law, a bankruptcy can stop a repossession and sale of your vehicle.  However, once the creditor has repossessed and sold the vehicle, it can only help you with any deficiency balance owed on the debt.  Typically cars are sold at auction for very little money compared to what is owed and the deficiency can be substantial.  If you are facing a repossession and would like advice on all of your legal options, call us today at (501) 753-7400 to set an appointment for your free consultation or you may contact us via the "Email for help" button on this website.

FREE Initial Consultation - we take the time to provide you sound and thorough advice on all of your legal options. After our visit you will walk away with a relief and peace of mind you have not had in a long time.

Put our years of experience to work for you.  Call us now: 501-753-7400.