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Auto Repossession

Automobile repossession
and bankruptcy

If Your Car Was repossessed, and you have not yet filed for bankruptcy…

If your car was repossessed before you filed for bankruptcy, you might be able to get the car back by filing for bankruptcy. But you must act quickly. Generally, once the car is sold at auction, you won’t get it back. The time period between repossession and auction sale varies by state, but is often around 10 days.  

If you have equity in a car, you have a bankruptcy exemption for the car. If you have non-exempt equity in your car, the lender must return the car because it is part of the bankruptcy estate, and the repossession is considered to be an illegal preference. (An illegal preference means a creditor was “preferred” by receiving payment within 90 days of your bankruptcy. The trustee has the power to decide who gets paid, not creditors.)

Once you have the car back, you’ll still have to either redeem the car or reaffirm the contract in order to keep the car.

If Your Car Has Not Yet Been Repossessed

If you are behind in your payments and file for bankruptcy, the automatic stay prohibits the lender from repossessing your car. However, the lender can file a Motion to Lift the Stay — essentially asking the bankruptcy court if it can proceed with the repossession. Most courts will allow the lender to proceed with the repossession unless you plan to invoke one of the below remedies.  

Call our law firm for assistance to get your car back. Phone: 1-888-275-2650