Smart Money Mom

Car Repossessions And Chapter 13 Bankruptcy

Heads up:

Did you just happen to loose the financial strength to repay your debt? Chances are you’re already considering filing for a chapter 13.

But then:

You’re afraid of your lender repossessing your equilateral or even other personal properties. For most people, it’s a car, a boat, or a motorcycle.

Well…don’t sweat it:

In this article, I have explained everything you need to know about car repossession and chapter 13 bankruptcy.


I will explain the repossession benefits of chapter 13 and discuss clearly some confusing talks around chapter 13 and car repossession.

Sounds great? Yes? Let’s get started:

How Does Chapter 13 Prevents Repossession?

So here’s the thing:

There’s a legal coverage in every approved chapter 13 plan called automatic stay. Simply put, an automatic stay stops your lender from claiming some of your financial materials.

For example:

An automatic stay stops your bank from collecting credit card debt and mortgage foreclosure.

But even better:

If your creditor already claimed your car or other possession prior to a bankruptcy, you can claim them back by filing chapter 13. Yes, the power of automatic stay does that.

Bonus help:

If you’re ready to file for chapter 13, I recommend these trusted attorneys to help you stop repossession today.

Now, the question is…

Do You Pay For Automatic Stay?

Well…not directly:

The payment you make is not a direct “automatic stay fee”. It is a payment to get the coverage for say a car, and you’re to pay the equivalent amount of your car payment.

To be precise:

This payment is called “adequate protection”. And you’re to pay it from the time you submit your repayment plan to the time of approval. This protection secures your car from depreciation too.

But there are exceptions:

When Do You Loose Your Automatic Stay?

Great question:

Like I mentioned previously, there are exceptions. For instance, if you just file a new chapter 13 after getting rejected of a previous one, you’re sure to loose this coverage.


If the court finds out you rejected a personal property lease, say for a personal equipment, it’s a sign you’re not going to be up to your payment plan.

Another question…

Can Your Creditor Lift Your Automatic Stay?

Quick answer:

Yes, they can, if they show your bankruptcy judge enough reasons with evidences to.

Here’s an example:

If they find out you have other HUGE debts with some other creditors, it’s a sign you’ll go back on your new payment plan. And with evidences to show, they can convince your bankruptcy judge.

Another one:

If you have a low credit score or have a horribly bad debt record, either or both is a reason to lift your automatic stay.

Rounding this up…


Filing a chapter 13 bankruptcy comes with a lot of cons and pros. But one of the most important advantage is protection against repossession.


You need to have the basic understanding of what repossession coverage you can get with chapter 13. I am sure this article have provided you with everything you need to know.

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