Bankruptcy, Chapter 13, Creditor Harrassment

Will Bankruptcy Save My Car From Repossession?

For some people a vehicle is no more than a means to get from here to there, for others a vehicle is a very meaningful posession and almost a part of the family.  For most, a vehicle is also a large monthly expense, second only to rent or mortgage payment.  In almost ever case, losing a car to repossession would have a major impact on a person’s life.  A question I frequently hear is “Will bankruptcy save my car from repossession?”  The answer  in most cases is yes.

 

The type of loan that most of us have on our vehicle is a purchase money security interest loan.  That means that the money that was loaned to you was used directly to purchase the vehicle.   Repayment of the loan is usually with a fixed interest rate for as long as 72 months.  A second type of car loan is called a title loan.  This loan requires that you have a clear title (no other loans) on your vehicle and is normally a short term loan with a very high interest rate.  Filing a bankruptcy can save the car regardless of the type of loan.

 

Chapter 13 Bankruptcy is used to refinance your car at the bankruptcy interest rate (currently 5.25%) for up to five years.  This includes any amount that you might be behind on with your loan.  Your car payment will be part of your Chapter 13 bankruptcy payment.  You will no longer pay the lender directly for the loan.  As long as you make all of your required bankruptcy payments your car will be safe from repossession.  In addition, the lender will no longer be allowed to contact you (ever again) about the loan.

Our vehicles (cars, trucks, motorcycles) are very important to us for a large range of reasons.  Filing a Chapter 13 bankruptcy is an effective means of preventing the lender from repossession the vehicle.

Bankruptcy, Chapter 13

Help! My Car Has Been Repossesed!

Written by Columbia Bankruptcy Attorney David Melnyk

In the back of your mind you knew this morning was coming.  Every night for the the past 2 months you have gone to bed wondering whether or not your car would be there in the morning.  You woke up today, looked outside, and it was gone.  W

When you purchased the vehicle you thought you could make the loan payment work.  You were so excited to have the transportation that you needed and proud that you received the financing for it.  Now you are struck with the very real problems of getting your kids to school and getting yourself to work.  You had been communicating with the finance company for months about your struggles to make the payments but they were ultimately unwilling to offer repayment terms you could afford to catch up on the amount you were behind.  You do have options to get your car back!

One option to take possession of your vehicle is to file a Chapter 13 Bankruptcy.  Once I file  Chapter 13 bankruptcy for you the loan company must return the vehicle to you.  There are some very important conditions that must, however, be met.  First of all the car must not have been already sold at auction.  Once this happens it is too late to get it back.  Secondly, you must be able to prove that you have current insurance on the vehicle.  Most insurance companies will provide you with two insurance cards.  Keep one in your card and the other in your purse/wallet.  You must also be able to show that you can afford to pay for the car as part of your bankruptcy.

In most cases once the above conditions have been met the finance company will make arrangements for the return of your vehicle within 24 hours.  If you have any questions about the process of filing a Chapter 13 Bankruptcy to regain possession of your vehicle please contact me for a free consultation.

Bankruptcy, Chapter 13

Will Filing Bankruptcy Stop IRS Wage Garnishment?

Written by Columbia Bankrutpcy Attorney David W. Melnyk

Is the IRS garnishing your wages?  You work very hard for every dime of your paycheck.  To see a large percentage of it taken from you by way of IRS wage garnishment is a big blow.  If you are like most people you live either pay check to pay check or something close to that.

After proper notice the IRS can seize over 50% of your paycheck subject to a few limited exemptions.  The IRS wage garnishment will last until the IRS tells your employer to stop it.  Under the law your employer does not have a choice.  If your employer receives notice of the garnishment it must comply or it will have big IRS problems of its own.

What are your options?  You can pay your tax balance in full.  However, if  this was possible you probably would have done so long before the wage garnishment became an issue.  You may have success communicating directly with the IRS to work out a payment plan to pay your back taxes.    Depending upon the total amount of the IRS debt, and the years for which you owe, the IRS may offer a reasonable payment plan.  Acceptance of the repayment plan may stop the garnishment.

A more powerful option available to you is to file a Chapter 13 Bankruptcy.  Once the case has been filed your employer must stop taking your hard earned money and sending it directly to the IRS.  We will compute a monthly payment that you will send in as a Chapter 13 Bankruptcy payment.  This payment will include the amount necessary to satisfy the IRS.  We may be able to reduce  the total amount that you are required to pay to the IRS.  The amount that you pay back will be without any additional penalties or interest in most cases.  While you are in the bankruptcy, the IRS will not garnish your wages.

Please note that filing a Chapter 13 Bankruptcy does not totally relieve you from your tax obligation.  However, it will provide immediate relief from the wage garnishment and will prohibit the IRS from harassing you about your tax obligation.