Getting Back Your Repossessed Items While in Bankruptcy

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Bankruptcy protects your assets from being repossessed by your creditors.  However, if a repossession occurs within 90 days prior to when you filed for bankruptcy, you may still be able to get your creditors to return your repossessed items if you can convince the court that a preferential transfer has occurred.  A preferential transfer is when an asset is sold within 90 days prior to bankruptcy that may give a creditor an unfair advantage over another creditor. In that instance, the court will order that the asset be returned to you if it has not been sold.  An example would be if your car were repossessed before you filed bankruptcy.  If the court orders your creditor to return the car, then you have the option of keeping your car by using your state or federal bankruptcy exemption or reaffirming the debt.

If your car has been sold, any personal items in the car must be returned to you.  Otherwise, you are entitled to be compensated or reimbursed for the loss of those items. Repossession and bankruptcy are complicated matters.  It is recommended that you talk to a bankruptcy attorney to help you get your repossessed items back and to assist you with your bankruptcy matters.  The attorney can explain the repossession and bankruptcy laws to you and answer your questions.

Chapter 7

If you file a Chapter 7, you may be able to keep your home and your car and some personal assets if they fall within the state or federal bankruptcy exemptions.  All other assets will be liquidated to pay off your creditors.  Chapter 7 gives you a fresh start.

Chapter 13

Chapter 13 allows you to keep your home, car and other assets by entering into a payment plan for 3-5 years with your creditors that must be approved by the court. If you default on your car payment or your mortgage, your car could be repossessed, and you could lose your home to foreclosure.  

While bankruptcy stops repossession and foreclosure, it may not be the best option if you have other options to restructure your credit cards, other bills and your mortgage.  Also, you can only file bankruptcy every 8 years so if you fall behind on your car payment again or your mortgage, you won’t be able to use a bankruptcy to stop the repossession or the foreclosure.

Hire a Bankruptcy Attorney

A bankruptcy attorney can help you keep get your assets returned or assist you with keeping your assets.  The bankruptcy attorney can advise you of your legal rights, prepare your bankruptcy petition and other documents and represent you in bankruptcy court.