When You Should NOT Make a Monthly Car Payment
This is such an important topic, you MUST get clear direction from your attorney before you decide to stop making payments on your porperty. However, there are instances where you will actually stop making car payments, even some times when you plan on keeping the vehicle.
If you have discussed redeeming your vehicle with your attorney and have committed to this option, then you will be making one lump-sum payment to the car lender.
This will be due upon Order of the Court. It is very important that you discuss these details with your attorney should you be trying to redeem your vehicle. However, just know that if you do plan to redeem your vehicle, you will not continue making regular car payments during the course of your bankruptcy and should consult with your attorney on exactly how and when you should pay your auto lender.
To learn more about vehicle redemption read our blog Chapter 7 Bankruptcy: What Will Happen to My Car Pt. 1.
If you do not want to keep your car, that is simple, you will not make those car payments. Once you are sure that is your intention and you are prepared to return the car, you can stop making those payments.
If you choose to do this it is important to understand that prior to the filing of your case, if you are behind on your car payments, at anytime your car could be repossessed. Once we file your case, your auto lender will have to ask for permission from the Court before they can repossess your vehicle. Typically, once your pleadings are filed and the auto lender discovers you intend to surrender the vehicle, they will contact our office and we will make arrangements to return the vehicle. To learn more about car payments during your bankruptcy read Paying Bills During Bankruptcy Pt. 3: Car Payments.