What should I do if I don't want my car repossessed? 19 Answers as of June 20, 2013

I filed for chapter 7 and in the paperwork it was asked if I plan on keeping anything. I indicated that I plan on keeping my car. I am current on my payments and I have never been late. I just received a letter from my credit union and attorney that they want to repossess my car. How did this happen?

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Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
You will need to file a reaffirmation agreement.
Answer Applies to: Washington
Replied: 1/27/2012
Law Office of Susan G. Taylor
Law Office of Susan G. Taylor | Susan G. Taylor
They probably playing tough because you did not execute a reaffirmation agreement. I'd contact the lender & offer to execute a new loan on the car, if they'll agree. With your payment history, they should.
Answer Applies to: Texas
Replied: 1/25/2012
Lindsey Scott and Associates | Lindsey Scott
Ask for a reaffirmation agreement.
Answer Applies to: Louisiana
Replied: 6/20/2013
Gregory J. Wald, Attorney at Law
Gregory J. Wald, Attorney at Law | Gregory J. Wald
Credit Unions often take the position that you must sign a reaffirmation agreement in which you agree that your personal liability on the debt will not be discharged in bankruptcy or else return the vehicle. A reaffirmation agreement must be entered into prior to the discharge of your debts.
Answer Applies to: Minnesota
Replied: 1/23/2012
Carballo Law Offices
Carballo Law Offices | Tony E. Carballo
Maybe you misunderstood the letter because the credit union cannot repossess the vehicle if you are current on the payments (unless the bankruptcy court give them permission to do that which will not be given if you are current on payments). Maybe they want you to "reaffirm" the debt which means entering into a new contract with the credit union for the car loan under the same terms and have the bankruptcy court approve it. Generally reaffirmation is not necessary but you need to discuss with an attorney if you should do that. Your car cannot be repossessed without permission from the bankruptcy court. If the credit union is asking for permission from the court to repossess your car then that would be because they claim you are not current with the payments and you can go to the hearing and take proof that you are current so that the bankruptcy court will not give the credit union permission to repossess your car. To get permission to repossess the car the credit union has to file a "motion for relief from the automatic stay" and send you a copy of the motion papers and tell you the date of the hearing in court so that you can attend and oppose the motion.
Answer Applies to: California
Replied: 1/23/2012
    Grace Law Offices of John F Geraghty Jr.
    Grace Law Offices of John F Geraghty Jr. | John F. Geraghty, Jr.
    You could redeem your car in a Chapter 13.
    Answer Applies to: Georgia
    Replied: 1/20/2012
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    It happened because you made the always catastrophic mistake of filing without a lawyer. Get one and see if your missteps are fixable.
    Answer Applies to: Georgia
    Replied: 6/20/2013
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Generally as long as you keep current on the payments the lender will not repossess the vehicle. What they may want you to do is to "Reaffirm" the debt. This can only be done if your chapter 7 case is still open and you allowed for the car payment in schedule J and have at least even income and expenses. What I would advise is to call the attorney or credit union and indicate that you believe you are current on the car payments and ask what the problem is. If you are not current on your payments you may have to catch up on them immediately.
    Answer Applies to: California
    Replied: 1/20/2012
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    The credit union probably requires you to sign a reaffirmation agreement. Contact them and tell them you want to keep the car.
    Answer Applies to: California
    Replied: 1/20/2012
    Eliza Ghanooni, Attorney at Law
    Eliza Ghanooni, Attorney at Law | Eliza Ghanooni
    Generally, credit unions require debtors to enter into a reaffirmation agreement on a car loan. If your case has not been discharged yet, you still have time to enter into it. Your attorney should handle this for you.
    Answer Applies to: California
    Replied: 1/20/2012
    Heupel Law
    Heupel Law | Kevin Heupel
    If you're current on your payments, then the credit union is seeking repossession because you did not reaffirm the debt. Although very few creditors do it, car lenders have the right to repossess a vehicle after discharge if you didn't reaffirm the loan.
    Answer Applies to: Colorado
    Replied: 1/20/2012
    The Law Offices of Deborah Ann Stencel | Deborah A. Stencel
    It's not clear from your stated facts exactly what is going on, but I suspect that your case is complete, a discharge has been issued, and no reaffirmation agreement was filed. If that is the case, you may not be able to do anything. You could try a motion to reopen and revoke the discharge in order to sign and file a reaffirmation agreement. I have seen these succeed with a mortgage before, but I have also seen such motions fail. Your best bet is to contact an attorney for guidance here. If the above is NOT the case, make sure your payments were properly credited to your account, if not, clearing that up will resolve the matter.
    Answer Applies to: Wisconsin
    Replied: 1/20/2012
    Law offices of John P. Brooke | John Brooke
    The most likely reason is that you either did not sign a reaffirmation agreement or that in the loan paperwork it states that filing for bankruptcy is a breach of the loan agreement and that you are in default and that they have a right to repossess. This happens a lot with credit unions. You may want to call them and explain to them that you want to keep it and are willing to sign a reaffirmation agreement.
    Answer Applies to: New York
    Replied: 1/20/2012
    AyerHoffman, LLP
    AyerHoffman, LLP | David C. Ayer
    Contact your bankruptcy attorney about reaffirming the loan. Technically, the bankruptcy discharged your obligation to pay under the loan contract leaving the credit union with no way to enforce the contract for payments. The repossession is the only way it has to protect its investment now. A reaffirmation will take care of this problem. It is very unlikely that the credit union really wants to take the car as it will almost certainly not be able to sell it at auction for the amount you owe on it and will end up losing money.
    Answer Applies to: Massachusetts
    Replied: 1/20/2012
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    In order to keep your car, you have to sign a reaffirmation agreement that basically says you are re-signing to pay for your car, how long etc. However, some credit unions will not reaffirm your car loan if you caused them some kind of loss, for example if you had a Visa card with them that you discharged in the bankruptcy and re not agreeing that you will repay them for. So either of the two would cause the credit union to come and repossess the car!
    Answer Applies to: Michigan
    Replied: 1/20/2012
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    In order to keep your car in bankruptcy, you need to reaffirm agreement with the credit union and you should have indicated this intent on form 8.
    Answer Applies to: Florida
    Replied: 1/20/2012
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    In order to keep the vehicle, you have to reaffirm the debt. It isn't enough to simply keep making your payments.
    Answer Applies to: California
    Replied: 1/20/2012
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    One thing I can guess happened is that you did not execute and caused to be filed a reaffirmation agreement on time or at all. Your car lender may be able to repossess even if you are current with your payments if the purchase agreement you signed says that they can declare your loan in default if you file for bankruptcy protection or words to that effect because the 2005 amendments changed the law. After those amendments, Chapter 7 debtors must execute a reaffirmation agreement on time as required by the law. If they do not, Bankruptcy Law allows the provision in the contract that says that bankruptcy is an event of default to be enforced. You need to review your original purchase agreement to see if the car lender is within its rights.
    Answer Applies to: California
    Replied: 1/20/2012
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