Filing Bankruptcy After Repossession
Bankruptcy is known for helping people stop vehicle repossession when they file before the lender attempts to take the property. But what happens if the repossession has taken place before your petition was filed? Can you get it back? There is a possibility you can get your vehicle returned to you after beginning the filing process, yet under certain circumstances.
If you fall behind on vehicle payments you may be able to file Chapter 13 bankruptcy to help get current. Yet, in a situation in which the vehicle was repossessed before you filed for protection, you may be able to file a motion for turnover. This is a court issued order for the lender to return the vehicle to you. In this sense, your vehicle needs to be a necessity to your household. In other words, if it is needed to help you get to and from work so you can earn income to make payments, you may want to review whether filing the motion is an option.
In some cases, once the vehicle has been taken by the lender, the debtor questions whether they should consider trying to get it back. You may need to set up a payment agreement with the lender and have it approved by the court, likely setting up a repayment schedule for Chapter 13. It is also possible a motion may not be needed to be filed for the car to be returned to you if the lender learns about your bankruptcy. Plus, some debtors decide not to get their vehicle back; after obtaining a discharge it may be easier to get a different vehicle with a better monthly payment. Discuss your situation with your bankruptcy attorney .