Some people in Tennessee who are facing repossession of their vehicles might consider filing for Chapter 13 bankruptcy. This would potentially allow them to restructure a payment plan and keep the vehicle. However, there may be other alternatives that the person can try before bankruptcy.

Some lenders are willing to negotiate with people who are struggling to keep up with their debts. Adjusting the due date might be all that is needed for some people. If a person is struggling with a temporary financial issue, the lender might agree to defer one or two payments. Loan modification may lower the payment, or refinancing might be an option for people with a good payment record and credit score.

If none of these are possible and the person is struggling with other debt, bankruptcy might be the best solution. The automatic stay that kicks in on filing for bankruptcy means that creditors cannot take further action. At this point, with a Chapter 13 bankruptcy, a person may decide to surrender the vehicle, pay what is owed or get a reduction on the amount owed that is tied to the current value of the vehicle. Since a Chapter 13 bankruptcy involves a payment plan that last for three or five years, a person who files still needs to be able to keep up with the restructured payments.

Filing for bankruptcy also stops foreclosure, lawsuits related to the debt and other creditor actions. Bankruptcy can allow a person to keep some assets while still getting a fresh financial start. An attorney may be able to assist a person in assessing whether filing for Chapter 13 bankruptcy is the best option. The attorney may also be able to assist with paperwork. The paperwork involved in a bankruptcy filing can be complex, and any errors may delay the filing.