Automobile Repossession in Bankruptcy

If you’re struggling financially and can’t make your car loan payments on time, your lender may move to repossess your vehicle. When a lender repossesses an asset, it typically resells the asset and uses the proceeds to recuperate a portion of their losses.

Losing an automobile can have serious personal and financial repercussions. Without a reliable mode of transportation, you may have difficulty living independently or commuting to work, which can make your situation even more precarious.

However, even though lenders and creditors have a potential right to take back their property if borrowers fail to make the required payments, you should know you have rights, too. For one, if you can satisfy your outstanding loan payments before the vehicle is sold at auction, you are permitted to reclaim it.

This may sound like a tall order if you’re having trouble making one loan payment, let alone paying off a backlog of accumulated debt. The good news is that you may be eligible to file for bankruptcy, which can help halt the process of repossession while you get your finances back on track.

Bankruptcy is a legal process that allows people to eliminate or reduce unmanageable debt by developing an affordable repayment plan or selling off certain assets. When you file for bankruptcy, the court will enact an automatic stay, which prevents lenders from pursuing collection activities against you during bankruptcy proceedings.

Filing for bankruptcy can help give you the fresh start you need. If you have questions about whether bankruptcy could be the right choice for you, it’s best to discuss your case with an attorney.

Contact the knowledgeable bankruptcy attorneys at Amourgis & Associates today for a free consultation.

Vehicle Repossession Rules

Lenders have plenty of options when it comes to repossessing your vehicle, but they are also subject to several rules and limitations. Under Ohio car repossession laws:

• Repossession agents are prohibited from opening the closed doors of your home or garage without invitation to take your car away.
• Repossession agents are not allowed to use violence to repossess your car.
• Repossession agents may not trick you into giving them your car, such as by persuading you to bring the car to a shop under false pretenses and then taking it. However, agents are permitted to seize your vehicle if you take it to a shop willingly and then leave.
• Lenders and repossession agents are not required to notify you ahead of time if they plan to repossess your vehicle.
• Lenders are not required to attend a hearing or obtain court approval to repossess your vehicle.
• Lenders must mail you a notice to inform you of your right to retrieve your vehicle if you satisfy your outstanding debts before the date of the auction.

Can Filing Bankruptcy Stop Repossession of a Vehicle?

So, can filing for bankruptcy stop car repossession? It depends. The automatic stay ordered by the court effectively makes it illegal for your lenders to continue their collection efforts.   However, after the bankruptcy is filed, lenders can seek permission from the court to lift the automatic stay. To do so, the lender must demonstrate to the court that it should be entitled to repossess the vehicle under the provisions of the bankruptcy code.

Fortunately, it’s possible to fight this action by requesting your own hearing in court. During the hearing, you can submit evidence to demonstrate why your lender shouldn’t be allowed to repossess your vehicle. An experienced bankruptcy attorney can help you defend against these efforts and potentially negotiate a payment plan that will allow you to keep the car.

You must move quickly to save your car.

It’s important to note that in car repossession cases, timing is critical. The repossession process tends to happen quickly. Ohio law, in some circumstances, allows lenders to resell the vehicle in as little as 10 days from the date of repossession (if the notice is sent out on the same day as the repossession).   . Once your vehicle has been sold, you may be out of options.

If you are behind on your payments and suspect your car may be repossessed soon, it’s always best to act before your lender does. Remember, your lender wants to get paid. If you can work out a manageable bankruptcy repayment plan before they repossess your car, you may be able to keep it.

If your vehicle has already been repossessed but is not yet up for auction, it could be possible to get the car back, but you’ll need to contact an attorney immediately. A car repossession attorney can explain the rules and legal process involved in a chapter 7 or chapter 13 car repossession case, help you evaluate your options, communicate with your lenders, and expedite the bankruptcy filing process.

Contact a Bankruptcy Lawyer Today

In many cases, filing for bankruptcy in an Ohio car repossession case is the best way to save your assets and work toward financial stability. The dedicated lawyers at Amourgis & Associates can provide honest legal advice and help you get back on your feet during this difficult time.

When you choose to work with our team, we will review every detail of your situation and provide a thorough, personalized legal evaluation. We will be there every step of the way to help you craft custom solutions to immediate and long-term problems. To learn more about how we can help you, contact us for a free initial case review.