How can sending a finance company a cease and desist letter allow someone to keep a car?

Answer 1

A cease and desist file is in fact telling the finance company that you have already contacted a lawyer in regards to filing a petition to file for bankruptcy. Once that petition is filed you are given a 30 day period where no payments are due, and no other actions can be taken against you, while the court considers your petition. Then if the court accepts the petition, you are granted another stay until the final proceedings. If the court denies the petition, they have a 24 hour period of wait to see if it is appealed. You should be aware of the fact that the finance company will get the car in the long run, and they will dispose of it at auction. And you WILL be billed for the difference of what you owed from what the sale generates, since the car is the collateral of the loan. The only way that this won't happen is if the car is sold at total finance payoff, or the judge rules that you are incompetent to pay the balance. If it does go to auction, and they bill you the difference it must be paid in full at the courts discretion. Installment payments can not be worked out for that balance since you are now insolvent. Really you should have posted this under Finance rather than in the computers and internet section, where accountants are standing by to answer questions like this. Hope this helps

Answer 2

As per Hire Purchase Acts/ rules even if One instalment is due the company can cease your car. Better to Pay up the instalments borrowing money somewhere else !

Answer 3

I believe that is used only to notify them of your intent to file bankruptcy. That stops them from dealing directly with you, and then they can only contact your lawyer. It stops the repo until the court rules on the bankruptcy. If you don't file, they have every right to take the car if you haven't paid as agreed.