Legal Question in Bankruptcy in North Carolina

On a short term basis, you should contact the lender and ask for relief. Most lenders do not want to repossess a car and will work with you for some time. The relief might be a moratorium on payments, or payment of interest only (more often available for loans with real estate as collateral). A bankruptcy filing does stop any repossession action immediately but for a limited time. This is because of the "automatic stay" which is a court order effective upon filing and continues until lifted. In a Chapter 7, the stay is lifted at the time of discharge (about 4 months) or upon request by the creditor and hearing. In a Chapter 13 the discharge is not granted until the plan is completed or 3 to 5 years. The plan must provide for at least payment of the fair market value of the car in order to be confirmed. In some circumstances, such as purchase of a car within 910 days of filing, the plan must cure default in payments and pay the debt in full to be confirmed. Prior to confirmation, the creditor is entitled to adequate protection payments to prevent loss of value of the collateral during the plan preparation stage. At any time during the bankruptcy a deal can be made with the creditor which gives relief. The management of a secured creditor can be a process to work out options as they present themselves. Of course, mere default in making a car payment probably is not enough by itself to file a bankruptcy. The entire financial situation must be evaluated with the bankruptcy and non bankruptcy options explored. An experienced bankruptcy lawyer will present such options. Generally speaking, if you are in default in making payments and any grace period has passed and the creditor has complied with consumer protection notices, once located, the car is fair game for repo if it is in a public place and the taking will not breach the peace or otherwise violate the law. The creditor could also bring a suit to demand a judgment and turnover.