Will filing for bankruptcy stop repossession?

Filing for bankruptcy in Texas can have an effect on repossession. Depending on the type of bankruptcy you file, you may be able to stop, or delay, repossession. Chapter 7 bankruptcy is a liquidation bankruptcy, which means that all your non-exempt assets are sold to pay off your creditors. This means that if you have a car or other property that is subject to repossession and it is not considered exempt from bankruptcy, filing for Chapter 7 will stop the repossession. Chapter 13 bankruptcy is a reorganization bankruptcy. With Chapter 13 bankruptcy, you develop a repayment plan that allows you to repay some or all of your creditors over a three to five-year period. If you file for Chapter 13, you can usually keep your car as long as you make regular payments. Therefore, filing for Chapter 13 can stop or delay a repossession. It is important to note that while bankruptcy can provide relief from repossession, it does not make you immune from it. If you do not make the payments agreed to in a Chapter 13 reorganization plan, your creditor may resume the repossession process. Additionally, if you are able to reaffirm the debt associated with the car, you can still be held responsible for the car loan and repossession can occur if payments are missed.

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Will filing for bankruptcy stop repossession?

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