Car Repossession

Can Filing Bankruptcy in Atlanta, Georgia Protect me From a car Deficiency Balance?

If you have had a car repossession in Atlanta, Georgia, filing bankruptcy can protect you from a lawsuit for the deficiency balance. Normally, when you default on a car payment, the car creditor can repossess the car as a remedy for your failure to pay. However, repossession of the car does not normally enable the creditor to recover all of its losses, which means you can still get sued after repossession. After a car is repossessed, the bank sells the car at auction; typically, the amount recovered is less than the amount owed on the loan. Thus, the creditor sues the borrower to recover the difference.

For example, let’s say you have a $20,000.00 loan on a car that the creditor repossesses and sells for $10,000.00. After the sale at auction, the creditor can sue you for the $10,000 deficiency balance. If you qualify to file a Chapter 7 in Georgia, the entire $10,000.00 deficiency balance can be wiped out, and the creditor cannot sue you or collect that money in any way. Or, if you file Chapter 13, you can roll the deficiency balance into one monthly payment with all of your other debt; the car creditor will receive anything from 0% to 100% of the balance, depending on what you can afford to pay. Even if the creditor has already sued you, bankruptcy can stop a lawsuit in Georgia. Upon filing bankruptcy, the bankruptcy court issues an order preventing creditors from suing, collecting, garnishing, or even calling you to collect debt.

If you are facing a lawsuit from a car deficiency balance and need to talk to a bankruptcy attorney in Atlanta, Georgia, call the Law Offices of Charles Clapp at 404.585.0040 for a free consultation.