Little Rock Repossession Attorneys

Worried about losing your car to repossession? Relax, you’re in the right place. 

At WH Law, we get it — life can throw some tough punches, especially when it comes to keeping up with car payments. A Little Rock repossession lawyer from our firm can help you fight back against those big banks and keep you on the road.

If your car has been repossessed or is about to be repossessed, it can be a very stressful financial situation. We know it is no fun having to keep a lookout for a tow truck at every gas station. You may feel like there is no way out and that the creditor will take your automobile away for good! 

Rest assured: this is not true. All hope isn’t lost if you’re trying to avoid repossession. In fact, there are many steps you can take to keep your vehicle in your possession!

Don’t let repossession make you another number in the system. Contact WH Law today, and let us help you keep your ride. You deserve to be treated with respect, not just as another case file.

What is Repossession?

 

Here’s the deal: repossession is when a lender takes back property used as collateral, like your car, if you stop making payments. They have to give you a heads-up first, but it can happen faster than a catfish darting in the Arkansas River.

That’s why you need a savvy Little Rock repossession lawyer on your side — someone who knows the ropes and will fight to ensure you’re treated fairly. This isn’t just paperwork — it’s your life and livelihood.

The repossession process is simple. Once your car is repossessed, the creditor can sell it at a public or private sale. Most states allow consumers to keep their automobiles for a limited time after repossession, but Arkansas law even gives you a chance to get it back. In Arkansas, you’ve got 10 days to pay off what you owe, plus any fees and interest.

To redeem, the consumer must pay the full amount left on the car note and any costs and interest that the sales contract specifies. For example, if the consumer defaults on a $20,000 payment after making $5,000 of the car payment, to redeem the vehicle, you would have to pay the full $15,000 left on the note plus costs and interest.

Reasons For Car Repossession

 

There are a few common reasons that banks will try to have a car repossessed. The most common reason is when someone falls behind on their car and has too many late payments. 

Arkansas has adopted the Uniform Commercial Code, which allows banks to repossess vehicles when the buyer goes into default without going to court.  

Sounds rough, right? But they can’t just grab your car in the middle of the night without warning -– they have to follow the law. The creditor can only repossess the vehicle if it does so without breaching the peace. 

Chapter 13 Bankruptcy and Repossession

 

Let’s talk about a game-changer: Chapter 13 bankruptcy. By filing for Chapter 13 bankruptcy, you’ll be able to avoid all of this by proposing how to make your payment over a three to five-year period. 

In your plan, you can propose that your lender receive what your vehicle is worth instead of the outstanding balance. Your automobile may not be sold at auction after the case has been filed. The lender is obligated by law to give back your vehicle as soon as possible. It is much easier to stop the repo man than get your car back from him, but either way, we can help you keep your car.

It might sound scary, but it’s a legal way to reorganize your debts and keep your car. Say you borrowed $35,000 to buy a new car in 2015. In 2018, your car is only worth $15,000, and you owe $25,000. 

This means that only $15,000 is “secured” because if the lender repossessed your car and sold it, it would only receive $15,000 (this is the car’s replacement value). This is where a “cramdown” can help you make your payments more manageable.

In your Chapter 13 plan, you can propose a “cramdown” payment plan that pays only the replacement value of the car through bankruptcy. So, in the above example, you can lower, or “cram down,” the balance of your loan to $15,000 (the value of your car) and tell your lender this is all you are going to pay.

The cramdown requires that you purchase the vehicle and take out the note at least 910 days (approximately two and a half years) before filing bankruptcy. So, you cannot use a cramdown on a car you recently bought. We know that no person wants to hire a bankruptcy attorney, but sometimes, it’s for the best.

It can also be a difficult process to navigate, but that’s why we’re here. Our Arkansas repossession attorneys know how to navigate this process and will guide you every step of the way so you can lower your payments and keep your car.

Do I Still Owe Money After a Repossession?

 

The short answer is probably yes. 

In Arkansas, if the bank sells the vehicle and does not recover all of the money owed on your car, then the creditor can go after you for a deficiency judgment. This means if your car sells for less than you owe, the lender can come after you for the difference, plus fees and interest. 

For example, you defaulted with $15,000 owed on your car note and a repossession happened. The creditor then waited the required ten-day period and sold the vehicle in a commercially reasonable manner for only $12,000. If that happens, the creditor will then go after you for the remaining $3,000 plus repo fees and interest. Keep in mind that this can include all applicable fees, including storage fees.

However, when the bank sells the vehicle, it has to do it in a “commercially reasonable manner.” That means the creditor, for example, cannot sell the car worth $20,000 for $1,000. 

Stop Deficiency Judgment With Bankruptcy

 

When your car is repossessed and sold, any remaining secured debt becomes unsecured. In the bankruptcy process, you often don’t have to repay unsecured debt. So, if you’re hit with a deficiency judgment, filing for bankruptcy might mean you won’t have to pay that leftover balance. This can be a powerful way to help you turn things around.

When you still have your vehicle and owe money on it, that debt is secured, meaning the creditor can take your vehicle if you don’t make payments. However, if the vehicle is repossessed, the debt changes to an unsecured status. 

Many people worry about their credit report when considering bankruptcy, but the truth is that most people see their credit scores improve after filing. Since unsecured debts often don’t need to be repaid in bankruptcy, a deficiency judgment after repossession may mean you don’t have to pay yours back. That way, your credit could actually improve by filing for bankruptcy.

What Happens if the Repo Man Can’t Find My Car?

 

Once the repo process has been started, the repo man can take your vehicle from your driveway, your workplace parking lot, or even while you’re out shopping. 

Some folks try to hide their cars to avoid repossession by keeping them in a locked garage, parking them at a friend’s house, or taking off the license plate, but that can lead to more trouble. 

Repo companies are familiar with these tactics and will not give up. If your car stays hidden too long, creditors can sue you and get a judge to order you to turn over your vehicle. 

Remember, they can come after you with the repossession costs, so the more expensive it is, then the more you may have to pay. It’s usually best to face things head-on.

How to Stop Your Car From Being Repossessed

 

Here are five ways to avoid repossession in Arkansas:

1. Refinance your auto loan.
2. Reinstate your loan.
3. Sell your car yourself.
4. Voluntarily surrender your car.
5. File for bankruptcy.

Each option has its challenges, but they can help you dodge repossession and offer solutions if you’re struggling with payments.

Refinancing your loans may not be easy. If you are missing payments and facing vehicle repossession, then the past-due payments may be on your credit report. If you can refinance, the new loan may pay off your outstanding debt, and your new loan contract might even offer a better interest rate! 

Reinstating your loan requires making up all late payments. We understand this may be difficult when you haven’t been able to make a car payment.

Selling your car will also avoid repossession. Because you have control of the price it sells for, you may be able to sell the car, pay the remaining balance, and not have a deficiency balance. Additionally, you can always voluntarily surrender your car. This will stop repo men from coming to see you and lower the repo costs.

It may be in your best interest to file for bankruptcy with the helo of one of our Little Rock bankruptcy attorneys . When you file for bankruptcy, the court will issue an order called the “automatic stay.” This is a fancy way of telling your creditors that they have to stop trying to collect the money you owe them while the court hears your bankruptcy petition. 

If creditors continue harassing you after the automatic stay has been issued, they can be sanctioned and fined with hefty penalties. While some creditors don’t know about the automatic stay, we’d be more than happy to write a strongly worded letter to educate them about how they’re no longer allowed to pester you.

Can I Get My Car Back if it Has Been Repossessed?

 

If repossession of your car has already happened, you must act fast. When a creditor takes your vehicle, if they want to collect a deficiency balance after selling it, they will send you a letter stating how many days you have to redeem the car by paying off what is owed on it. 

If they are not going to try and collect a deficiency balance, then they can sell it without any notice to you. If you hire our law firm and start the attorney-client relationship, then we can help get your repossessed car back!

If your car’s already been taken, act fast. You have a short window to redeem your car by paying off what you owe. Filing for Chapter 13 bankruptcy can also help you get your car back and prevent it from being sold.

Get Your Car Back With WH Law

 

Don’t let creditors boss you around. If you’re getting calls from creditors or threats of repossession, contact a bankruptcy attorney in Little Rock today. If you need help, you can text or call, and we’ll make ourselves available ASAP.

Little Rock, if you’re facing repossession, don’t go it alone. At WH Law, we’re experienced in Chapter 7 and Chapter 13 bankruptcy, and we’re ready to stand by your side. Give us a shout for a free consultation. Let’s tackle this repossession issue together and get you back behind the wheel.