You may file your bankruptcy case before your car is repossessed or you can chose to wait until the creditor repossess your car to file your case.
The first thing to do would be to speak with a Kansas City Bankruptcy Attorney to determine which Chapter of Bankruptcy you will qualify for and if Bankruptcy is really the best option in your situation.
There are typically two Chapters of Bankruptcy that most consumers will end up filing under. A Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy. The Chapter you file under will be determined by your income / expense ratio under the Means Test and your desire to keep either secured property or non-exempt assets.
If the amount of debt you owe is relatively low, filing for Bankruptcy may not be in your best interest. You may be able to work with the Creditor for your car loan and avoid filing for Bankruptcy. If you are going to attempt to work with a Creditor, make sure you get everything in writing and be forewarned that there may be tax consequences regarding a settlement or if any amount of debt is written off by the Creditor.
However, if you decide that bankruptcy is going to be your best option there may be little to no benefit to try and work with the Creditor prior to filing. In fact, dealing with the Creditor at this point may only cause unnecessary stress.
You will let the creditor know your intentions through your Bankruptcy Pleadings. If you file a Chapter 7 Bankruptcy, then you will mark “surrendered” on your Statement of Intention. If you file a Chapter 13 Bankruptcy, the Creditor will know that you do not intend to keep your car through the language provided in your Plan.
Once you have filed your Bankruptcy case in Kansas or Missouri, the Automatic Stay will be in place and you will have the protection from the Court. A few phone calls may be exchanged between the Creditor and your Bankruptcy Lawyer and everything should go smoothly from there.