- April 20, 2021
Repossession laws come into effect when you have fallen behind on your payments for consumer items and the sales contract or terms of the purchase include a clause saying that the lender can take back the property if you default or are late on payments. The property involved can be a car, SUV, truck, kitchen appliances, furniture or other items.
If your debt is mounting, you may have skipped some payments on your auto loan or department store bill. While some companies may allow you a brief grace period, eventually creditors will become more demanding and may initiate action to repossess the property in question. If this sounds like your situation, it may be time to talk to a bankruptcy attorney. Rather than struggling to hold onto property and battling creditors by yourself, you may be able to lessen your debt and make a fresh start through bankruptcy. You can put a stop to harassing phone calls from creditors and catch your breath.
People can fall behind on payments due to unforeseen circumstances like job loss, serious illness or other economic setbacks. It’s not necessarily your fault. It’s just life. Attorney and CPA Jerry E. Smith understands that this can be very stressful and sometimes embarrassing. He approaches every client with compassion and optimism. To find out more about how we can help, call us for a free initial consultation up to one hour at (317) 917-8680.
Get hope. Get help. Get peace of mind.
Indiana Repossession Laws
Indiana Code 26-2-10 discusses the terms under which motor vehicles and watercraft can be repossessed. The creditor does not necessarily have to go to court to repossess your property if you have fallen behind on payments. A creditor typically uses a repossession company to retrieve property. For example, a “repo” company can come to your address and repossess a car from your driveway or a public street without a court order. They do not, however, have the right to enter your home, garage, enclosed or fenced in area without your consent. Nor can they use force or threats of force.
One of the best ways to potentially avoid repossession is to contact a creditor immediately (preferably before the due date) if you know you are not able to make a payment. In some cases, you can work out alternative payment arrangements or a temporary deferment with a creditor. Not all creditors will work with you, but some may. Be sure to get the new agreement in writing, whether they send it to you in an email or you write them a letter confirming the new arrangement.
If your vehicle or boat was repossessed and it contained your personal property, the creditor cannot sell, keep or discard these items (technology, clothing, household goods, etc.). Contact a creditor immediately and make arrangements to reclaim your belongings.
After a creditor repossesses a vehicle or boat, it typically sells it at auction and the proceeds of the sale are applied to the outstanding debt and the repossession fees and costs. You are entitled to be told the date of the sale. Often, the sales price does not cover the entire remaining balance due on the vehicle. If it doesn’t, then you are liable for any deficiency.
Negotiating a new agreement with a creditor to avoid or pause a repossession may or may not be possible for you. If it isn’t, it may be time to explore bankruptcy.
What Are the Different Kinds of Bankruptcy?
Bankruptcy in the U.S. is governed by federal law (rather than state law), and which type of bankruptcy you pursue depends on your unique situation. For introductory information about bankruptcy, see Bankruptcy Basics at USCourts.gov. Generally, individuals pursue either Chapter 7 or Chapter 13.
Chapter 7 is sometimes called a “liquidation” bankruptcy, which means that some items may be sold to pay creditors and then other debts are discharged. As soon as you file bankruptcy, all harassing phone calls and letters from creditors must cease. To qualify for Chapter 7, you must be able to meet a “means test.” Attorney Jerry E. Smith can explain this to you in greater detail. A Chapter 7 bankruptcy typically can be completed in a few months. This type of bankruptcy will stay on your credit record for 10 years.
Chapter 13 is sometimes called a “wage earner” or “reorganization” bankruptcy and is for people who have a steady income. It often allows a person to keep their home and create a court-approved repayment plan to pay off some debts. A Chapter 13 repayment plan typically lasts for 3 to 5 years, and once it is completed then certain debts are discharged. Chapter 13 can be an option for individuals who do not qualify for Chapter 7 under the means test. A Chapter 13 bankruptcy will stay on your credit record for 7 years after the repayment plan is completed.
What Debts Cannot Be Discharged Through Bankruptcy?
There are certain types of debts that usually cannot be discharged through bankruptcy. These include:
- Child support
- Spousal support
- Unpaid taxes
- Student loans (unless extreme hardship can be proven)
- Fines imposed for DUI convictions.
If you have questions about specific debts and whether or not they can be discharged through bankruptcy, a skilled and experienced bankruptcy attorney can advise you.
Contact Attorney and CPA Jerry E. Smith Today
If you’re feeling the heavy burden of debt or if your vehicle is being repossessed, it may be time to explore the option of bankruptcy. Rather than continuing to struggle with no end in sight, filing bankruptcy can put you on a firmer financial footing and give you a fresh start. Attorney and CPA Jerry E. Smith has helped hundreds of clients just like you who didn’t know where to turn. He will patiently answer your questions, explain your legal options, and help you take your first steps toward a brighter future. To find out more about how we can help, call us for a free initial consultation up to one hour at (317) 917-8680.