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When Ohio motorists cannot afford their car payments, they may voluntarily turn in the vehicle. Alternatively, the lender could repossess the auto after one or more missed payments. Typically, the lender will sell the car in an auction. However, if the amount the car is sold for is less than the loan balance, the consumer may owe whatever is left.

This is referred to as a car loan deficiency, and repo and storage costs may be included in that amount. To avoid paying this amount, an individual may choose to file for either Chapter 7 or Chapter 13 bankruptcy. Once bankruptcy is filed, the creditor may no longer proceed with collection efforts such as a lawsuit. However, if a judgment has already been obtained against the individual, it may require a special motion to stop a wage garnishment or remove a lien.

Filing for bankruptcy may also make it possible to retain ownership of the vehicle. For instance, a car owner may choose to pay the lender the current value of the car to satisfy a debt. It may also be possible to reaffirm a loan or simply surrender the vehicle during bankruptcy with no obligation to make future payments or worry about a deficiency.

Those who are seeking debt relief from secured creditors may want to file for bankruptcy. Chapter 13 bankruptcy may allow an individual to retain property while making payments over a three or five year period. In some cases, it may allow an individual to walk away from a secured debt by surrendering an asset. An attorney may be able to explain further benefits of filing for bankruptcy such as an automatic stay from creditor collection actions.