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Repossession Laws in Texas
If you took out an auto loan to buy your car or truck, you most likely signed a contract with a lender to make monthly payments until you repay what you borrowed. Under the terms of most auto loans (and Texas laws), if you don’t pay on time, the lender can take back the financed vehicle.
You can return the vehicle as a voluntary surrender, or the lender can send a repo agent to take it back. Texas laws provide some, but not many, protections. For example, when agents come to tow the car away, they cannot:
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Breach the peace
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Damage your property
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Threaten you
Once a lender repossesses a car, they auction it off and apply the sale price to the remaining loan balance. If it goes for less than what you owe — and it usually will, Texas laws allow the lender to pursue a “deficiency judgment” against you for the rest.
Protect Your Car or Truck From Repossession
Luckily, Texas bankruptcy laws allow you to avoid repossession. In addition to keeping you behind the wheel, bankruptcy can eliminate your other debts, too, so your total monthly bill payments will be much lower.
As soon as you file a petition in a Texas bankruptcy court, you’ll receive an automatic stay that requires your creditors to stop any and all collection activities, including repossession. You can file a petition under either Chapter 7 or Chapter 13 of the bankruptcy laws.
With Chapter 13, you can restructure your debt and establish a 3-to-5-year payment plan. You'll get to keep your vehicle and everything else you own as long as you stick to the schedule. You can also reduce your auto payment to match your car’s current worth.
If you go with Chapter 7, you can eliminate your debts entirely instead of repaying them. While the laws permit your belongings to be sold to repay your debt, this rarely happens. In almost every situation, you can work out a plan that lets you keep your vehicle.
An Experienced Attorney Can Help
If you've fallen behind and worry that your car or truck will be repossessed, call or text DebtStoppers today at 469-646-0750 to request a free debt evaluation with one of our experienced Texas attorneys. We have helped thousands of families stop repossession, and we can help keep your family on the road, too.
If you are at risk of losing your vehicle, don’t give up! You have options. Call or text DebtStoppers today at 469-646-0750 to prevent repossession before it’s too late.
