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Your Rights in the Event of a Vehicle Repossession

Falling behind on a car loan can result in the lender repossessing the vehicle. While it is possible to stop repossession by filing for personal bankruptcy, protecting a car from the creditor may only be temporary. It is important to understand the rights a creditor has to repossess a car during a Chapter 13 bankruptcy and a Chapter 7 bankruptcy.

Consumer assets that are not protected by state or federal law are sold in a Chapter 7 bankruptcy to repay creditors. Lenders of auto loans usually file liens against the vehicles. This makes them secured lenders and gives them rights to the vehicle that supersede those of other creditors when the court releases the vehicle from the automatic stay.  If the time comes that your vehicle is in jeopardy of being repossessed, do not panic, you still have rights.  Repo men must follow the law when taking your personal property.

Repo men have many tricks in locating your vehicle but generally are not allowed to use force when doing so.  Typically, repo men will wait until you have gone asleep or have left your vehicle for an extended period of time.  Regardless, they are not allowed to “breach the peace,” a term that is defined broadly.  Hotwiring vehicles or using duplicate keys are usually legal.  Further, courts have found it to be legal to repossess cars in open garages (door is up), or carports.  However, if the garage door is down or there are locks, the courts will likely find it to be illegal.

If you ever happen to catch a repo man in action, make sure you object or someone else (family, friend) at that time.  Repo men do not have all encompassing power.  Once there is an objection the repo man must stop, or it will be a breach of peace.  With that said, do not act in a way that will put yourself or others in harm’s way.  However, the repo man can try again another day.

Also, you should be aware that the repossession company is not entitled to your personal property found inside your vehicle.  The creditor must use reasonable care to make sure your personal items are not lost or damaged.  If your creditor can’t account for articles left in your vehicle, you may want to speak to an attorney about your right to compensation.

Finally and perhaps most important, you may still be able to get your repossessed vehicle returned to you by filing a Chapter 13 bankruptcy.  In order to accomplish this, you need to contact a Chapter 13 bankruptcy attorney AS SOON as possible after the actual repossession to learn about your options.


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