Repossession article written by Columbia, SC attorney Daniel Stone
For many people, filing a Chapter 13 bankruptcy to recover a repossessed car is their only option. I know the feeling. You walk outside to your driveway and you see your car is gone. Did someone steal it? Did I park it somewhere else? Then it hits you, you haven’t made your car payment for 2-3 months and it has probably been repossessed. The first thing you do is call the car lender and they tell you that if you want the car returned, you must pay the car loan in full. This leaves you the only option of filing a Chapter 13 bankruptcy to get the repossessed car returned. The following is the procedure most of my clients go through if they want to go the Chapter 13 route to get their car returned.
For most of my clients this means they have to file an emergency Chapter 13 bankruptcy to get the repossessed car back. The reason for this is that time is of the essence. South Carolina law allows a car owner so many days to redeem the car after it is repossessed or it can be sold at auction by the lender. For most of my clients, they are usually calling me a few days after the repossession so leaving less than 10 days to get the bankruptcy case filed. A Chapter 13 bankruptcy requires a significant amount of documentation to include tax returns, payment advice, county tax records of the home, business profit and loss statements, and a detailed questionnaire. However, due to the time issue, in repossession cases we are able to file an emergency case which require just a list of all your creditors and addresses. This allows us to get a bankruptcy case number and start the recovery process and file the remaining petition within 14 days of the filing date..
Once we have your case filed, we automatically receive a case number. From there, I can fax your car lender a demand letter requesting that the car be returned within 48 hours. With larger lenders such as Santandar or GMAC, it usually takes more time to find the right person to fax a demand letter to. Once we find the right person to speak with, the process begins to speed up. Within this letter we have to provide proof of the bankruptcy filing, proof of current insurance, and demand that the car be returned. Please note that the Honorable Judge Waites has stated in a prior case in this District that before a debtor files a Motion for Turnover, the procedure described above must be executed. In extreme cases, the bankruptcy attorney will have to file a Motion for Turnover to force the car lender to return the car back to the debtor.
Some final notes. Generally, I am able to get the car returned to my client without the client incurring any storage or repossession fees. However, in some circumstances they may have to pay a small fee. Also, a debtor does not have to drive an extreme distance to recover the vehicle. There are times they have even brought the car back to the Debtor’s residence. Finally, if the car lender is a small “mom and pop” company, it could take longer to get the car returned because they will often want to retain counsel first to examine their legal rights