What are my rights regarding a car loan and debt collectors?

UPDATED: Mar 8, 2012

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What are my rights regarding a car loan and debt collectors?

I have a car loan I have been late on recently due to my husband being laid off. I have since made arrangements to make payments and just made one last month. They are now harassing m day and night, by emails, texts and phone calls (very nasty). They even contacted my references on the loan , offering them a fee if they can get my car. They are refusing my payment. Is this legal if I am willing to make restitution? What are my rights? I am a nervous wreck with stress.

Asked on March 8, 2012 under Bankruptcy Law, Virginia


Darren Delafield

Answered 10 years ago | Contributor

Many loans have an acceleration clause which take away your right to make monthly payments following a breach of contract such as missing a payment.

Congress created chapter 13 bankruptcy to assist debtors who were laid off and need a second change to cure a default and resume monthly payments. You can use chapter 13 bankruptcy to stop a repossession, lower the interest rate, and in some case pay only the book value for the vehicle purchased more than 2 1/2 years ago. Chapter 13 is not the same as a Chapter 7 Bankruptcy and many banks and credit unions look upon Chapter 13 more favorably.

Chapter 13 also works well for restructuring car title loans which have become the "payday loan" of choice in Virginia.

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