Bankruptcy and Vehicle Repossession

Filing for bankruptcy can stop your vehicle from being repossessed. If your car has not yet been repossessed, filing for bankruptcy will stop any threat of repossession. Repossession done after filing for bankruptcy will be void and in most cases the lender will be ordered to return your vehicle. The automatic stay created by filing for bankruptcy stops the right of the lender to repossess your car.

Despite this, you must still maintain valid insurance on the vehicle. Additionally, you must offer adequate protection to the lender in the form of a Chapter 13 bankruptcy repayment plan or redeem/reaffirm the vehicle in a Chapter 7 bankruptcy. If you fail to do this, the lender will file a motion to lift the automatic stay so that they can repossess the vehicle.

If you have any question regarding bankruptcy call 1st California Law Inc at (949) 735-8499 for a free attorney consultation.

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