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How to Stop a Vehicle Repossession

Is your car, truck, motorcycle, boat, or other vehicle facing

repossession? Has your vehicle already been repossessed?

Do you want to find a way to keep your vehicle or even get

your vehicle back? Are you liable for a deficiency arising from

a vehicle repossession? If you answered "yes" to any of the above questions you have rights under the law that can provide protection and help.

Utah Repossession Law & Procedure

In Utah, repossession law and procedure is found in Utah's Uniform Commercial Code, Title 70A of the Utah Code. Utah law requires the would be repossessor to sell a repossessed vehicle in a "commercially reasonable" manner, give you notice of the time and place of sale, correctly calculate any deficiency as well as various other requirements. The original security agreement can also dictate, for example, how much notice is required. You can redeem or get your vehicle back by paying the entire amount you owe plus costs associated with the repossession. However, redemption must occur before the secured party sells the vehicle. Utah law also provides you with remedies when a secured party fails to abide by the repossession laws. In other words, you could sue the repossessor and potentially recover any damages you suffered as a result. Consumers have a right to any surplus from the sale of a repossessed vehicle but are also liable for any deficiency. In general, when a vehicle is repossessed and then sold the difference between the sale price and the amount you owed is the deficiency you still owe your lender. Most contracts also allow adding to the deficiency costs relating to repossessing and selling the vehicle, attorney fees, accrued interest, and penalties.

Chapter 7 Bankruptcy and Repossession

When you file a Chapter 7 bankruptcy the automatic stay goes into effect immediately preventing creditors from repossessing your vehicle. Unfortunately, a Chapter 7 filing will only delay the repossession unless you can get caught up on your missed payments and resume making regular payments. If you are unable to do this, the creditor can get relief from the automatic stay and resume repossession efforts. However, Chapter 7 can eliminate any deficiency for which you are liable as a result of a repossession.

Chapter 13 Bankruptcy and Repossession

A Chapter 13 bankruptcy offers several benefits not available in a Chapter 7 case in regard to vehicle repossession. The automatic stay also applies in a Chapter 13 case to prevent repossession from going forward. If a vehicle was repossessed before the bankruptcy filing, then the bankruptcy code will require the creditor to return the vehicle to the bankruptcy filer. If the creditor refuses, then a turnover motion can be filed with the bankruptcy court to force the creditor to return the vehicle. These protections only last until confirmation of the Chapter 13 plan. In order to keep a vehicle, a judge needs to confirm a Chapter 13 payment plan that provides for (1) payment of any amount you are behind in payments (arrears), (2) payment of regular monthly payments, (3) payment of interest (sometimes at a reduced amount), and provide for adequate protection payments.

Chapter 13 offers another great benefit, which helps reduce the amount you owe. If you purchased your car at least 910 days prior to your bankruptcy filing (about 2 1/2 years), then you can reduce the amount you owe on the vehicle to its replacement value. This is referred to as a cramdown because you are effectively cramming down a reduced value without the creditor's consent. A cramdown can mean big savings and allow you to afford the monthly payment along with other payments under your Chapter 13 plan.

Weekes Law, a Utah bankruptcy service provider, offers a free consultation to help you explore non-bankruptcy and bankruptcy options regarding repossession. Call 801.203.3525 or complete our form to schedule your consultation today.

Related blog posts:

Vehicle Repossession and Chapter 13 Bankruptcy

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.