Will filing for bankruptcy stop repossession?

Yes, filing for bankruptcy may stop repossession. When you file for bankruptcy, an automatic stay goes into effect. This means that creditors cannot take any action to collect a debt while the bankruptcy is pending. This includes repossession. In Mississippi, state laws dictate what property you can keep in a Chapter 7 bankruptcy. This is called “exempt property.” Certain types of property are exempt, such as your home, car, and other items that are necessary to your livelihood. Therefore, if the item that would be repossessed is exempt property in Mississippi, it cannot be taken. In a Chapter 13 bankruptcy, you may be able to keep your property if you sign a reaffirmation agreement. This is an agreement between you and the lender to keep the property if you agree to remain current on the payments for the length of the bankruptcy repayment plan. If you fail to make payments on the reaffirmation agreement, the lender can repossess the property. Overall, filing for bankruptcy in Mississippi may stop repossession of your property if it is otherwise exempt or if you enter into a reaffirmation agreement. However, it is important to note that this only applies to those in Mississippi and not to all states.

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Will filing for bankruptcy stop repossession?

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