Big Brother Grounds Car Owners for Late Payments
If you have less than perfect credit and need a car, you may not only pay more for a vehicle, but it may come with features you’re not aware of until you miss a payment.
AOL Autos reports many subprime car dealers are now equipping vehicles with devices that can disable them from a distance.
This means that when a car payment is late, the dealer or lender has the option of making the car inoperable.
The shut-off devices are controlled remotely and are linked to the vehicle’s power train.
If a payment is late, the vehicle can be rendered immobile in an instant. In most cases, before power to the vehicle is cut, the driver is alerted by sounds and flashing lights as a warning that the payment is overdue.
In some cases, the devices come with GPS tracking, making repossession after shut-off easier.
More lenders are now requiring the shut-off devices as a condition of loans to people with tarnished credit.
Those who support the use of these devices say the consumers get a better deal and lower interest rates because of the reduced risk of these loans.
The Bankruptcy Automatic Stay May Stop Car Repossession
Car owners who are faced with the threat of repossession can benefit from the automatic stay of Chapter 7 bankruptcy.
The automatic stay is an order of the bankruptcy court, which in nearly all cases is issued shortly after the bankruptcy petition is filed.
It prohibits creditors from taking any collection action, including repossession, until the stay is lifted, the bankruptcy is discharged, or the property in question is no longer part of the debtor’s estate.
Debtors who are having problems with making ends meet, due to a job loss, medical emergency or as a general product of the recession, may feel more concerned with feeding their family and keeping a roof over their heads than making a car payment.
If there is simply not enough money to cover the car payment due to other financial obligations, Chapter 7 bankruptcy may help.
Under Chapter 7, many unsecured debts may be discharged.
This includes many debts such as credit cards and medical bills. By having these debts discharged, many debtors are able to get a fresh start and better manage their mortgage and car payments.
After filing Chapter 7 bankruptcy, debtors may have the opportunity to reaffirm debts, such as car loans.
This means that a promise to pay the debt is given and the property is retained. Those who were drowning in credit card debt before filing bankruptcy may find that they can reaffirm the debt and keep their vehicles after the revolving credit debts are discharged.
What Can You Do?
If your car is equipped with an automatic shut-off device and you miss a payment, or anticipate missing a payment, it can be a good idea to consult a bankruptcy lawyer to discuss your options.
It is generally not advisable to “threaten” bankruptcy when creditors call. If your lender knows you may be filing bankruptcy, repossession efforts may be expedited.
If you wait until your car warns you or the shut-down is executed, your car may be repossessed before your bankruptcy petition is filed.
If you wish to keep your vehicle, the protection of the automatic stay is essential. To receive this protection, your bankruptcy petition must be officially filed with the court. If this is you wish, contact a bankruptcy lawyer today.
