What to do if I filed Chapter 7 and the bank that owns my car has notified me of their intent to sell it and hold me responsible for the deficiency?
Question Details:
The bank is one of the creditors listed with the trustee and we surrendered the car as part of the bankruptcy and the account total. The bank sent a notice that they they're auctioning the vehicle and the difference between the selling price and what we owed, we will be liable for. I was under the belief that they received the vehicle back and the debt would be dismissed. What's going on?
Unless you reaffirmed the debt on the vehicle in your bankruptcy case, then you owe no further obligation to that creditor (assuming you receive a discharge in your bankruptcy case). If your case is still open and the creditor did not obtain relief from the automatic stay to sell the vehicle, then they are also in violation of the automatic stay, and you can obtain sanctions against them under 11 U.S.C. 362.
If they in fact try to collect a deficiency from you after they sell the vehicle, you can seek to have them held in contempt of court pursuant to 11 U.S.C. 524.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
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