Troy, Ohio Bankruptcy Attorney Answers, “Can Filing for Bankruptcy Help Me Keep My Car?”
Transportation is a integral part of everyone’s livelihood. Without it, you can’t get to work. Children can’t get to school. Your life is essentially hindered in numerous ways. However, many Americans are facing repossession of their vehicles because of unforeseen economic conditions. Can filing for bankruptcy help you keep your vehicle? While this should not be the primary reason for filing bankruptcy, the short answer is yes. Here’s why.
While not all states agree, Ohio is on the same page as a New York case (Weber vs. SEFCU) that was recently ruled on by the U.S. Court of Appeals for the Second Circuit. The court sided this past May with a car owner that sued his credit union for repossessing his vehicle while he was going through bankruptcy. The court ruled that the creditor must return the vehicle if the owner files chapter 13 before the vehicle is sold.
The reason behind this ruling is pretty clear. The automatic stay provision of the Bankruptcy code forbids anyone from taking control of a debtor’s property during an ongoing bankruptcy case. When a person files for bankruptcy, all property becomes part of the estate and section 542 of the Bankruptcy code demands that anyone possessing estate property return it to the assigned trustee. When a person files chapter 13, the debtor is the trustee. Therefore, the court ruled the credit union must hand over the vehicle plus pay damages and attorney’s fees.
What This Means to You
This above mentioned case happened in New York. However, Ohio is one of the states that agrees with this case. In Ohio an owner can reclaim a vehicle after it has been repossessed as long as bankruptcy is filed before the car is sold. The car can be paid for through a chapter 13 plan. To simply keep your vehicle is rarely a reason to file for bankruptcy. However, if you are experiencing financial difficulty that has resulted in getting behind on car payments, defaulting on your mortgage or accumulating a large amount of unsecured debt, filing for chapter 13 may be a wise option. It’s important to know your rights and what you’re entitled to, including the fact that you can keep your vehicle. Chris Wesner Law Office is a Troy, Ohio bankruptcy attorney ready to help you through this process. Contact us for a free consultation.