Do I have to give her the car back and if I do does she have to pay me the money she is behind? 14 Answers as of October 31, 2013

I own a car dealership. I repossessed a car and the customer just applied for chapter 7 on August 19th. They did not add this car in the bankruptcy. I repossessed the car on Sept 7th. Today I get a letter from the attorney that they are going to do a reaffirmation agreement to get her car back. She is about a $1000 behind plus repo fees.

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Law Office of Thomas C. Phipps | Thomas C Phipps
You have to give the car back. You cannot get the back payments until the case is over.
Answer Applies to: Missouri
Replied: 10/31/2013
Goldsmith & Guymon
Goldsmith & Guymon | Marjorie Guymon
A debtor can avoid the repossession by a secured party if the debtor still has equity/rights in the property. However, a condition on returning physical possession of the property back to the debtor is to assure adequate protection of the secured party's interest in the property. Under Nevada law, which adopts Article 9 of the UCC, title doesn't transfer until the property is foreclosed upon. Repossession is merely a means of facilitating transfer of title. But if the debtor is completely underwater, courts have held that the debtor no longer has any interest in the property and is not subject to turnover. Reaffirmation must be approved by the court. I would not surrender the car but rather make the debtor file a motion for turnover or otherwise force you to enter into a reaffirmation agreement.
Answer Applies to: Nevada
Replied: 9/17/2013
Stephens Gourley & Bywater | David A. Stephens
Technically the stay was in force when you repossessed the car. If you do not give it back they will likely file a motion to get it back. You will then have to oppose the motion to keep the car.
Answer Applies to: Nevada
Replied: 9/16/2013
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
You may be in big trouble. If you repossession the Car after the Filing of the bankruptcy you are in violation of the automatic stay. You simply can't do this. My advice is to deal with the attorney and get a reaffirmation agreement.
Answer Applies to: California
Replied: 9/13/2013
Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
You didn't say when the car purchase took place. If the purchase was prior to the bankruptcy filing then you violated the Automatic Stay court order when you proceeded with repossession without an Order for relief from the bankruptcy court. It sounds as though you need to consult with and retain counsel who can offer you specific legal advice for your situation.
Answer Applies to: Colorado
Replied: 9/13/2013
    Elkington Law
    Elkington Law | Sally Elkington
    If you repossessed the car after the debtor filed for bankruptcy, you will either have to go in and try to get relief from stay, nunc pro tunc, which means allowing something after the fact. That is a step hill to climb. Technically you may have been in violation of the automatic stay if you repossessed the vehicle after the bankruptcy.
    Answer Applies to: California
    Replied: 9/13/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You repo the car after she filed bankruptcy so yes you have to return it and they will have to pay your fees that are due. You should have an attorney file a reaffirmation agreement for you.
    Answer Applies to: New York
    Replied: 9/13/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    If you repoed the vehicle less than 10 days after the bankruptcy took place, then you must return it. Whether or not the debtor will be able to reaffirm the debt will depend on whether the lender agrees to a reaffirmation or not. Most lenders will not allow a reaffirmation if the debtor is delinquent in making payments. if you are not the lender, then this isn't really your problem, is it! Your client, the lender, is responsible for your repo fees.
    Answer Applies to: Nevada
    Replied: 9/13/2013
    Armstrong Kellett Bartholow P.C.
    Armstrong Kellett Bartholow P.C. | Gary Armstrong
    Unless you got the stay lifted prior to the repossession, you just violated the bankruptcy code by picking up the car. But, that is probably a separate issue from the reaffirmation issue. Reaffirmation is voluntary and you do not have to agree at all. But, before you make further mistakes, you may want to hire a bankruptcy attorney that you can go to with these kinds of problems.
    Answer Applies to: Texas
    Replied: 9/13/2013
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Yes, she needs to sign the reaffirmation agreement and has to be caught up. However, you should contact your attorney about the repo fees, I believe you are out of luck, because you repoed after she filed for bankruptcy so you should not have repoed at all without getting a lift of stay from the court.
    Answer Applies to: Michigan
    Replied: 9/13/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Her rights in the car depend on state law. You could file a motion for relief from the automatic stay to sell the car.
    Answer Applies to: California
    Replied: 9/13/2013
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    From the facts that you presented, it appears that you violated the automatic stay (if you did not have notice, the violation should not be considered willful, but a violation nonetheless). If you do not cooperate with the debtor in attempts to reaffirm, the violation could be considered willful and could subject you to sanctions. You should seek counsel to assist you in resolving this matter. This answer was provided as a public service to a question posed on the Law Q & A website. The answer is based on the information provided and is limited to those facts. Furthermore, the answer is based on California law and their application to bankruptcy law in California. Additional information could change the context of the question and materially change the answer.
    Answer Applies to: California
    Replied: 9/13/2013
    Scott Goldstein | Scott Goldstein
    If they are reaffirming the car, then yes.
    Answer Applies to: New Jersey
    Replied: 9/13/2013
    Stuart P Gelberg
    Stuart P Gelberg | Stuart P Gelberg
    You must return the car period. You are also responsible for preparing the reaffirmation.
    Answer Applies to: New York
    Replied: 9/13/2013
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