What to do if a car is repossessed after a bankruptcy discharge and3 years of making payments?

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What to do if a car is repossessed after a bankruptcy discharge and3 years of making payments?

My wife had a bankruptcy discharged 3 years ago. She kept her car and kept making payments which at the time of discharge were 3 months behind. Her bankrupt attorney never filed the re-affirmation with the loan company. Now after paying faithfully the finance company had her car repossessed. We married in last year and moved out of state. Her car was taken last night. After filing a stolen vehicle report we found out that it was repo’d. She called the finance company and they are telling her that she has to pay it off completely if she wants it back. Does she have any recourse? We are both handicapped and depended on that vehicle for transportation to medical vehicles.

Asked on November 18, 2011 under Bankruptcy Law, New York

Answers:

Michael D. Siegel / Siegel & Siegel, P.C.

Answered 9 years ago | Contributor

In order to keep the car you had to be current.  If you were perpetually 3 months behind, then the repo is proper.  If the repo is proper, the demand for payment is proper.  I disagree with the prior post that there was malpractice.  You did not need to reaffirm.  You just needed to be current, which you were not.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If your wife's bankruptcy attorney failed to file the re-affirmation of the loan concerning her car that was recently repossessed with respect to her previously filed bankruptcy, she needs to contact him or her about what needs to be done from his or her end due to the failure of this filing.

As to the lender that recently had the car repossessed, given the absence of the filed re-affirmation and the three (3) month deliquency at the time of discharge, the lender seemingly was within its rights to have the auto repossessed under the security agreement for the loan. Your wife might need to consult with an attorney malpractice lawyer if the car situation results in a deficiency sale of it where she is obligated on a judgment to the lender.


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