Over the years doing repossessions including all types of collateral, I couldn’t even begin to remember how many times the car had to be returned to the debtor. That’s right, returned right to the debtors driveway, door to door service, no fee’s, no questions asked nothing. What would happen is either as soon as the car gets repo’d the debtor would call the police to find out where it was, at that moment they would call their attorney and follow through with a bankruptcy filing.
Filing bankruptcy to avoid repossession
If the person being repossessed has an attorney, either the debtor will call and let the bank or finance company know they are in bankruptcy and give the attorney’s phone number or the attorney will call the bank upon the repossession and all they have to do is mention the word bankruptcy and the bank will immediately call the repo company and ask that the car be returned right away as it is now in legal status or bankruptcy. The good news is if the car has already been picked up, the bank will still pay, but if the car has not yet been picked up, the order will be immediately canceled. All the cases we had, we made sure if possible to pick them up the very same day the case was given in order to always get paid on situations like these or not lose repossession orders.
Losing the repossession order due to bankruptcy
In this business there are many reasons to lose a repo order so it’s never a smart move for a repo company to sit on orders for more than a day or two. This of coarse doesn’t apply with high value collateral as they are much more complex typically, however for car repos, very important to get on them the same day. Besides bankruptcies, there are several other ways to stop the repo order. Making the payment- This will automatically cancel the repo order. Surely varies by state law, but probably get a lawyer to file some kind of motion can maybe get the car back for a while.
When I file bankruptcy do I get to keep the car?
In my experience from what I have seen, in most cases no. What it does is extend the time until the bankruptcy is discharged and usually that very same day a new repossession order is sent out. A lender will mark their calendar for the exact date of discharge and make sure its gone that very same day. However if in the time during bankruptcy something else is worked out or you manage to pay off the car, then that time gained turned out to be worth it for you. But normally a few months down the road we remember the order, or it matches one of the orders previously documents in the system.
Bankruptcy laws have changed since and we are not legal experts so it’s always best to contact a lawyer to help you somehow save your car or try to save your car.