Being in debt is not uncommon. Having financial problems that put you behind on payments is stressful and difficult. If you find yourself unable to keep up with everything, drowning under the piling bills, bankruptcy might be a good option to protect yourself.
You may be worried about your car being repossessed, preventing you from working enough to settle all of your debt, but fortunately there are some key protections available that can help. Here are the basics you need to know about repossession and bankruptcy.
Motor vehicle exemption
Kansas has a generous exemption law. When you apply for bankruptcy, a stay is automatically placed on your debt, preventing immediate repossession. Lenders can contest the stay in court and potentially take your car, but the Motor Vehicle Exemption extends your protection.
Chapter 13 bankruptcy
The only way to protect your car from repossession is by committing to work with a court to map a payment plan for all of your debt through Chapter 13 bankruptcy. Kansas is one of the few states where Chapter 13 protects a vehicle better than Chapter 7.
While your bankruptcy case is pending, your car cannot be repossessed, and you may be able to get back a car that has already been repossessed. This is contingent on timing, so if you face losing your car you need to file quickly. It's also important to note that once a judge officially approves a payment plan, you can lose your car if you default again.
Chapter 7 Bankruptcy
In some situations, Chapter 7 may be helpful. But you need to reaffirm the loan. This process also requires that you come current on the loan to keep the vehicle.
Kansas is not a state where you can get by easily without a car. Understand your rights so you can protect yourself. Many people fall on hard times and struggle with debt. You shouldn't face these trials alone.
Seek legal advice so you can take the best course of action from the start. You can defend yourself from unscrupulous debt collectors and get back on your feet. Contact Wiechman & Gasper, P.A. to speak with an experienced bankruptcy attorney. We will discuss the debt relief alternatives available, answer your questions and help you pursue the right option that fits your needs.