Bankruptcy Automatic Stay: Stop Repossession

The automatic stay is one of the most powerful tools when it comes to filing bankruptcy. This is one of the first rights you will obtain when you file for bankruptcy. As soon as you file the documents in bankruptcy court, you receive an automatic stay, which means that no legal action or any collection action is able to be taken against you as long as the stay is in effect. It will last throughout the bankruptcy unless the court rules otherwise.

Repossession and the Automatic Stay

For those who are facing repossession, this means that the lender is taking back his or her property because you failed to make payments towards it. One of the most common examples of this is the repossession of a vehicle, but it may be for televisions, computers and even furnishings for your home. If repossession is something that your lender has threatened, it is best to file bankruptcy right away to get the protection of the automatic stay.

• Once the automatic stay goes into effect, the repossession actions stop. Lenders are unable to collect from you at that point. The lender of the property must stop the legal action required to repossession the property.
• If you plan to continue paying on the property, and have the means to do so, this automatic stay period is the best time to get caught up on the payments. If, during the bankruptcy process, the court determines you cannot keep up on payments, or that you have not gotten the loan up to date, you could lose the vehicle.
• The property owner can petition the court and ask the court to allow the repossession to continue, even before the Creditor’s Meeting. The court will grant this if you have not made attempts to get caught up on the debt.

The automatic stay can be lifted in many situations if the bankruptcy trustee determines it necessary. If you plan to allow the property to be discharged, or seized by the courts through the bankruptcy, alert the courts of this.

Hiring an Attorney

In nearly all situations, it is best to have an attorney by your side especially when you are facing repossession. The attorney can help you to plan to avoid the potential negative legal move that creditors can have. The key is to act quickly and to use the automatic stay to help you to save your possessions if it is possible to do so.