As a Los Angeles Bankruptcy Lawyer, I would rarely say that Car Repossession can be a good thing. But consider the following situation.
Car repossession could turn out to be a good thing. I have been a Los Angeles bankruptcy lawyer for 34 years. I’ll tell you a story about a certain repossession. Then, you decide if you agree with me. Here are the facts:
I have a new client. She is a single mom. She gets no help. She is a very hard working person. She has a full time job, and a part time job. Her car was just repossessed. She can use public transit to reach her main job. She can’t get to her part time job without the car. Her main concern is protect the income from her part time job. Her car payments are $485 per month. Her car insurance is $125 per month. She spends about $400 per month on gas. Car maintainance averages around $75 per month. Her take home pay from the part time job is around $700 per month. She is always running late on car payments. Her main job pays enough to cover food, rent, utilities and other essentials. But she never seems to have enough money to pay anything on time.
My client wants to know if I can get the car back. I tell her yes, I think so. Chapter 13 bankruptcy provides concrete repossession help. As a repossession lawyer, I have been able to get cars returned with 24 hours. if the bankruptcy had been filed first, it would stop the repossession. At least temporarily. I added up some figures on my calculator. Then, I gave her the shocking news. She is better off without the car. She is also better off without the part time job.
Why her car repossession was just the thing she needed to improve her life.
Here’s the math equation they didn’t teach us in school. She can do just fine without her car. In fact, better than she was doing when she had the car. And just fine without her part time job. Here’s why. Her take home pay from the part time job equals $700 per month. But her car expenses total $1085 per month. Getting to and from the part time job was also robbing her of 2 hours of commute time. (Communting in Los Angeles gridlock is no Sunday picnic.) The part time job was making her lose $385 per month. It was also robbing her of her sanity, and making her sacrifice time she needed to spend with her child.
My shocking advice: She should be filing bankruptcy, quitting her part time job, and letting the car go.
This repossession client will wind up owing a deficiancy balance after the repossession is sold at auction. The sales proceeds will be applied to her loan. It won’t cover what she owes, and there will still be a balance. Ordinarily, the lender would then sue and garnish her wages. But she needs a bankruptcy anyway. She owes about $18,000 on various credit cards that she can’t afford to pay. The deficiancy on the car and her credit cards can be discharged in bankruptcy. Her child has benefited having a lot more time with mom. Mom has the patience to help her daughter do homework, and time for her daughter’s extra ciricular activities. All in all, isn’t that a good thing? Of course it is.
Sometimes things happen for the best. It did, in this instance.
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