I AM 3 PAYMENTS BEHIND ON MY TRUCK PAYMENT BUT I AM AFRAID OF FILING BANKRUPTCY DUE TO THE CREDIT IMPLICATIONS.  CAN YOU HELP ME?

I will never deny that filing a bankruptcy affects your credit.

However, a discharged Chapter 13 should stay on your credit report for seven years rather than 10 years, which is the longest a bankruptcy can stay on your credit report.

Late Payments Also Affect Your Credit

However, since you are behind on your truck payments, that also has a negative effect on your credit report, and if the truck is repossessed, that will certainly have a negative effect on your credit report.

However, the main thing that you as a consumer must understand if you live in the 3rd, 10th or District of Columbia Circuits,  is that a secured creditor is not required to turn over a vehicle that has been repossessed immediately or face contempt charges.

Filing for Bankruptcy After Vehicle Repossession

If you file for a Chapter 13 bankruptcy in the 3rd Circuit after your vehicle has been repossessed, you must file an adversary proceeding and a complaint demanding turnover.  This is not only a costly endeavor but it is extremely time-consuming, which may prevent a debtor from getting back a vehicle for a long time, unlike previous situations when you would get back the truck within a few days of filing a Chapter 13.  Because of the split amount the circuits, this issue is ripe to go before the United States Supreme Court.

Don’t Delay Filing for Bankruptcy

Thus, based on the current 3rd Circuit opinion, anybody who is behind on their auto payments should IMMEDIATELY file a Chapter 13 to protect themselves.  Even though it affects your credit, you may lose your vehicle if you do not file for bankruptcy and your credit will be adversely affected with the late payments and repossession.

Also, in light of the recent 3rd Circuit case, if you wait to file Chapter 13 AFTER your vehicle is repossessed, it may not be worth the cost and time involved under the current state of the law.

THUS, DO NOT DELAY FILING IF YOU WANT TO KEEP YOUR VEHICLE.

Get in Touch

If you have any questions concerning any type of bankruptcy filing, please contact TAIEBLAW at 856-235-4994 or visit our website TAIEBLAW.COM

Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 34 years and is board certified in consumer bankruptcy law by The American Board of Certification, which is accredited by The American Bar Association.