Understand Your Vehicle Repossession Rights
Are you behind on paying your car loan, truck loan, four-wheeler loan or boat loan? Are you afraid your vehicle will be repossessed? When you have so much else on your plate, the last thing you want to deal with is losing your vehicle. Fortunately, there is help in Chapter 13 bankruptcy and the laws of Louisiana.
The highly qualified attorneys of Simon, Fitzgerald, Cooke, Reed and Welch, can help explain your options and most importantly, your rights against creditors. Filing a Chapter 13 bankruptcy immediately stops creditors. The repossession is halted and your Chapter 13 plan provides how you intend to pay the creditor.
In some cases you may be able to pay the present value of the vehicle at a reduced interest rate through Chapter 13. If your car has already been repossessed, you must act quickly. You normally have 10 days from the date of repossession to file Chapter 13 bankruptcy.
Prevent Vehicle Repossession
Chapter 13 bankruptcy may be the best solution for saving your car or truck. Repossession is put on hold as long as you continue paying for the vehicle or pay for the vehicle in your Chapter 13 Plan.
(1) You continue making the original payments until the vehicle is paid off, with any arrears included in your Chapter 13. You can sometimes pay only the present value of the vehicle at a reduced interest rate through your Chapter 13 plan.
(2) The “cram down” law applies if you have owned the vehicle for 910 days (2 1/2 years) or more. You would be required to pay only the current retail replacement value of the vehicle, instead of the full balance of the debt, quite possibly saving you thousands of dollars. Additionally, in most cases, the interest rate can be lowered.
How Creditors May Try To Repossess Your Vehicle
There are three common methods of repossession:
- The “voluntary repossession” method: This is the method used by many creditors. They attempt to advise you that you must sign the voluntary surrender. You do not have to sign anything. Under this method, if you do not sign, they cannot take your car. A voluntary repossession form is just that, voluntary. You never have to sign it. Creditors may claim that you must sign the form and some may inadvertently do so. However, you do not have to sign this form and should consult with an attorney if you are faced with one.
- The court order method: Creditors can go to a judge and obtain a court order to seize your vehicle. There are no documents for you to sign and a deputy sheriff or marshal will have your car towed.
- The “self-help” method: This is a highly restricted method in Louisiana. There is no need for a voluntary repossession form. If they have done this properly, they can take your vehicle without your signature. Chances are the creditor did not follow the strict guidelines under the law. Talk to an attorney about your individual situation.
Regardless of the method the creditor uses, we usually can get your vehicle back to you by filing a Chapter 13. It is important you consult with us as soon as possible after the seizure.
Your Rights Against Creditors
Louisiana severely restricts “self-help” repossession. The lender or car dealer cannot hire a “repo man” to take your car in the dead of night without first complying with Louisiana’s very restrictive self-help law or one of the other methods of legally taking your vehicle. Many times people will have their vehicle repossessed, thinking it was completely legitimate. They may have been tricked into thinking their release was not required or gave a release without knowing it. That is why it is so important to understand your rights and when they have been violated. We can take legal action on your behalf.
Schedule A Free Consultation With Our Experienced Bankruptcy Lawyers
Past due on a vehicle loan? We can help. Please call us today at 888-341-8091 to take action to protect your rights. Do not sign a voluntary surrender or any other document relating to your vehicle until you have consulted with one of our experienced Louisiana bankruptcy lawyers. We offer a free consultation and no upfront attorney’s fees are required in Chapter 13.