Cars and Repossessions

Cars are important assets for people in North Carolina, and car loans are often major debts in a household. Chapter 13 bankruptcy offers means to stop repossession and make car loans more affordable. When a car is paid-off, North Carolina law provides exemptions, including a Motor Vehicle Exemption and a Wild Card Exemption, that can protect a car through a chapter 7 or chapter 13 bankruptcy.

We discuss Cars and Repossessions in more detail on the following pages:

  • Bankruptcy to Save a Car or Workout an Auto Loan

    Bankruptcy stops threats of repossession. The bankruptcy automatic stay halts collection activity, and the lender must obtain court permission to repossess a car after bankruptcy has been filed. In chapter 13 bankruptcy, you can pay off a car loan, even if you are behind on payments. Sometimes, chapter 13 provides improved financial terms for paying the car lender.

  • Modifying Secured Loans in Chapter 13

    A secured loan is any loan where the lender has an interest in collateral they could potentially take to pay the debt, including mortgages, deeds of trust, liens, and car loans. For bankruptcy debtors with secured debt, they can choose to file chapter 7 or chapter 13. Chapter 13 may offer options to adjust the terms on which the secured loan is repaid. Chapter 7 debtors who keep secured property generally pay the secured loan on the same terms as before bankruptcy. In both chapters, turning the property over to the creditor is also an option. This post discusses how and in what circumstances chapter 13 can alter secured loans.

  • Stuck in a High Interest Car Loan? Chapter 13 Can Lower Rates

    Here in North Carolina, a car is typically essential transportation. Owning a car can be vital to continued employment. Lenders and car lots know this, and are very willing to loan money to buy a car. The catch, however, is a high, sometimes very high, interest rate. A high interest rate strains a household budget, and can prolong the debt burden beyond the serviceable life of the car. Bankruptcy offers tools for consumers to get out from the burden of crushing auto loan interest.

  • The Facts on Car Loans: Eight Questions

    When I meet with an individual considering bankruptcy who has one or more car loans, I ask a number of questions. These questions provide an essential outline of car loans in bankruptcy.