Car Repossession & Bankruptcy: How to Get Your Car Back
Car Repossession & Bankruptcy: How to Get Your Car Back
If Your Car Was Repossessed Before You Filed for Bankruptcy
If your car has already been repossessed but has not yet been sold at auction, you may still have a chance to get it back by filing for bankruptcy. However, you must act quickly—once the car is sold at auction, you cannot recover it.
Each state has different laws regarding how soon a repossessed vehicle can be sold, but the window is often as short as 10 days.
How Bankruptcy Can Help You Get Your Car Back
If you have equity in your car and file for bankruptcy:
- You may have a bankruptcy exemption that protects some or all of your car’s value.
- If any portion of your car’s equity is non-exempt, your lender must return the vehicle because it is part of the bankruptcy estate.
- The repossession may be considered an illegal preference—meaning the lender took unfair action within 90 days before your bankruptcy filing. In this case, the bankruptcy trustee may force the lender to return the car.
Once your car is returned, you will need to:
✔ Redeem the car (pay its current market value in a lump sum), or
✔ Reaffirm the loan (agree to continue making payments under the existing contract).
If Your Car Has Not Yet Been Repossessed
If you are behind on payments but your car has not yet been taken, filing for bankruptcy can provide immediate protection. The automatic stay—a court-ordered pause on collections—prohibits your lender from repossessing your car while your bankruptcy case is active. Car Repossession & Bankruptcy: How to Get Your Car Back
However, your lender can still:
- File a Motion to Lift the Stay, asking the bankruptcy court for permission to repossess the vehicle.
- Proceed with repossession if the court grants the motion—unless you take action to protect your car.
Your Next Steps
🚗 Want to stop a repossession or get your car back? Time is critical.
Contact our experienced attorneys today to discuss your options.
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