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There are certain complications that may arise in recovering an automobile after it has been repossessed, so it is always best to file your Bankruptcy Petition prior to the time your car is taken by the Creditor. Most often people are aware that a car is likely to be repossessed because the Creditor has made numerous efforts to resolve the past due amount through telephone calls, written correspondence, and other means of resolution. Normally, it is only when it appears that a person is not capable of making the payments on the car that a Creditor will take the severe action to repossess the vehicle.
One of the complications of recovering a repossessed car is that there are additional fees and assessments that are related to the repossession of the vehicle. Under most contracts of sale, the buyer of the vehicle consents in advance to pay all such costs that are reasonably incurred. Therefore, although you can recover possession of the car, you need to evaluate whether or not the car is worth the amount that is owed on it, plus all of the additional costs that are incurred in the repossession efforts. If you file a Chapter 13 case, you will still only be paying for the fair market value of the car.
In a Chapter 7 Bankruptcy, the recovery of a repossessed vehicle is more complicated, but not necessarily impossible. Each case has it’s own intricate details that need to be evaluated, so it does not lend to an answer that is generally applicable to all cases. Please contact our office if you have questions as to whether or not recovery of your automobile would be probable under your given circumstances.
Lastly, it should be noted that under the impending new Bankruptcy laws, treatment of automobiles in general in Bankruptcy Cases will be significantly different than previously. If you have purchased a vehicle within the past two and one-half years, it is likely that you will be required to pay for the entire amount of the automobile if you intend to retain possession of it. This is a factor that you have to consider in your determination of not only which Bankruptcy Chapter you intend to file, but also a substantial amount of planning may be necessary to assure that you have sufficient transportation after you have filed your Bankruptcy.
Is your car in jeopardy of being repossessed, or has repossession recently taken place? Call us today, or schedule an appointment online.
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