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How Bankruptcy Can Stop Repossession in NJ

Knowledgeable attorney helps debtors hold onto vital property

If you are heavily in debt, you’re probably dealing with harassing and threatening phone calls as well as notices in the mail. But while you’re trying to scrape together the cash to meet your bills, you face another potential setback: the repossession of property you depend on to get by. At the Law Offices of James C. Zimmermann, we protect clients from repossession. Since 1991, our attorney has advised clients on how they can hold onto their cars, homes and other essential possessions. Bankruptcy is a powerful tool to stop repossession. We can show you how to get immediate peace of mind, as you take decisive steps toward a brighter future.

How repossession works

When you buy anything on credit — whether it’s a car, a home, a boat, jewelry, or a major household appliance — the property itself stands as collateral for the loan. If you fail to keep up payments, triggering a default on the loan, the lender is legally entitled to seize the property. Depending on the type of property, legal notice may or may not be required. For example, to repossess a home, a lender must go through the foreclosure process, but to repossess a car, the lender simply hires a third party, a repossession agent, to find the car and bring it back. You could get a knock on your door from a repossession agent, accompanied by the local sheriff, with an order to repossess items you have within your home.

The ongoing nightmare of auto repossession

The most common threat of repossession relates to automobiles. If you miss a loan payment, your lender might not hesitate to repossess the vehicle the way they would a home. That’s because cars and trucks depreciate in value quickly while they’re in use, and a single accident could destroy all their resale value. So, a consumer who is in default on an auto loan must worry day and night that his car will disappear.

Repo men can take your car off the street and in many cases can remove the vehicle from a driveway, although they are prohibited from entering a private garage to take the vehicle. Thus, many people resort to hiding the car somewhere in their neighborhood so the repo man can’t find it. This is usually a futile exercise.

Finally, often the worst part of repossession is that the vehicle may have depreciated in value so much that it doesn’t cover the full amount you owe on your auto loan. So, you can lose your car and still owe the lender money.

Stopping repossession through bankruptcy

If you need your car for work, repossession can put you further in the hole. It’s time to take a hard look at your finances and decide whether you are a candidate for bankruptcy protection. By filing Chapter 7 or Chapter 13 bankruptcy, you get immediate protection against repossession. The bankruptcy court issues an automatic stay, which prohibits your creditors from taking collection actions, including repossession. Chapter 13 is a reorganization bankruptcy that allows you to repay part of what you owe over time and have much of your eligible debt discharged. This makes it easier to meet car payments, so you eventually own your vehicle free and clear. Even Chapter 7, which is liquidation bankruptcy, contains a vehicle exemption that can allow you to keep your car or truck.

Contact an experienced New Jersey bankruptcy attorney to help stop repossession

The Law Offices of James C. Zimmermann helps New Jersey residents stop repossession through the bankruptcy process. To take your first steps toward a debt-free future, call 973-764-1633 or contact us online for a free initial consultation. We have five North Jersey offices to serve you, located in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley.