Virginia residents who are struggling to pay their bills may be concerned about having their car repossessed. Many people rely on their vehicles for work, school or family activities, and they may face an even more challenging crisis if their car is taken away. There are several ways that they can take action to avoid a repossession, which can include filing for Chapter 13 bankruptcy.

Some people may want to explore other options before making that decision. Lenders may be willing to change the auto payment due date for people who find the schedule to be a problem. When everything is due at the same time, people living paycheck to paycheck may find it even harder to pay on time. Some people may even be able to defer a few payments, moving them ahead to the end of the loan term. Other lenders may be willing to explore modified terms or refinancing for the vehicle, potentially changing the term or the interest rate of the car loan to reduce the monthly payment. These options are less common and may be available only to those with strong credit.

While the best way to prevent repossession is to act in advance, there are ways that people can protect their cars once the process has started. Filing for Chapter 13 or Chapter 7 bankruptcy can put in place an automatic stay of repossession. This does not mean that a filer does not need to pay the car loan, but it can provide breathing room.

There are specific provisions in Chapter 13 bankruptcy that may make it possible for people to keep their cars and reduce the amount that they owe. A bankruptcy law attorney may provide guidance on how filing for bankruptcy could provide debt relief and a beginning to a new financial future.

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