Having a repossession agent arrive on your doorstep to repossess your car is never a comfortable experience. The issue of repossession and bankruptcy is an interesting one and it can offer several opportunities for people who are in debt. If repossession is imminent, or if your car has just been repossessed, you need to file for bankruptcy as soon as possible.
If you can file for bankruptcy quickly, the court will order a stay of all collection activities by creditors. In most cases, repossessed goods that have been claimed in the days prior to filing will have to be given back to the debtor. In other words, your repossessed car will be returned to you.
This will only be a temporary situation, however, as the debt is secured by the vehicle and if you cannot catch up on any arrears and return your repayments to a good standing, then the creditor will be able to reclaim the vehicle. Your creditor has two options: To wait until the bankruptcy process has been completed, or to file for a lifting of the stay in regards to the vehicle.
As a debtor you have a number of options. You can prove to the court that you can catch up on the arrears – this can be difficult when any income you have will also be required to repay any other outstanding debts. You and your creditor may be able to reach an understanding whereby you reaffirm your debt. This is accepting the debt and giving an undertaking to repay the amount owed over time.
If your vehicle has already been disposed of, or if the court accepts the creditor’s claim that the time lapse between repossession and filing for bankruptcy was significant, then you won’t get it back. You are, however, entitled to have any possessions that were in the vehicle at the time of repossession returned to you. Your creditor, or their repossession agent, should list everything that was in the vehicle at the time it was repossessed. They should also advise you as to where and when you can collect these items. If they fail to return personal articles to you, you could be in a position to sue for their loss.
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