Can You Get Your Car Back After it is Repossessed in Pennsylvania

Walking out to your driveway or street to find your vehicle missing is a horrible way to start your day. If you were behind on your monthly loan payments, your car was probably not stolen. It was repossessed. Your lender is not required to give you any notice before taking your car. Lenders have this legal right if you miss one payment – even if it is only a day late.

Unfortunately, there are ways to retrieve your car. First, you can pay the lender what you owe them, including any costs incurred during the repossession, such as the fees charged by the repo company and any storage fees. If you cannot afford that route, you could file for bankruptcy.

Filing for bankruptcy stops your creditors from taking action to collect on a debt, including selling your repossessed car. Whether you get your car back depends on what type of bankruptcy you file. Our Philadelphia bankruptcy lawyers know this is a difficult time and will work with you so you understand the process. Call (215) 701-6519 to start working with Young, Marr, Mallis & Deane today.

Repossession in Pennsylvania

When a lender has a security interest in a vehicle, they are legally entitled to take the collateral back if a borrower defaults on their payments. There is no required waiting or grace period before a lender can take action. Technically, if you are one day late on a monthly payment, your car could be repossessed. As a practical matter, a lender will give a borrower a chance to cure a default before moving forward with a repossession. Nonetheless, the lender does not have to tell you they intend to take your vehicle. Unlike other creditors, they are also not required to obtain a court order before repossessing the collateral. If you are behind on payments or believe your car will be repossessed, contact our Pennsylvania bankruptcy lawyers.

Once your vehicle is repossessed, the lender must provide you with written notice of the repossession. This notice will include other information such as the default amount, the balance due, and where the vehicle is being stored. If you can cure the default, along with any additional repossession and storage fees, you can get your car back. However, if you are unable to do this, the lender will sell your car at either a public auction or a private sale. You will be given notice of the time and place of the sale. After the car is sold, the lender will send you a deficiency notice if the sale price fails to cover the remaining loan balance. In all likelihood, the lender will sue you for the deficiency.

Bankruptcy and Repossessions in Pennsylvania

One way for Pennsylvanians to address their debt is by filing for bankruptcy. Under certain circumstances, filing a Chapter 7 case will help a struggling person find firm financial footing. If your car was repossessed, it will probably not help get their vehicle back. When a Chapter 7 bankruptcy is filed, an automatic stay immediately stops the lender from selling the car.

However, unless the debtor can cure the default, the lender will file a motion with the court, asking permission to proceed with the sale. Unless you have the funds to cure the default, the court will grant the lender’s motion. One positive is that you will discharge any balance remaining after the sale. Our Delaware County (Delco) bankruptcy lawyers will review the pros and cons of filing Chapter 7.

If you want to get your car back and keep it, our office advises filing a Chapter 13 case. You will have to prove you have the income to qualify to file. However, if you do, you should be able to get your vehicle back and pay back the money you are behind through your bankruptcy plan.

To illustrate how this works, imagine your car was repossessed. Your monthly payment was $300 and you were four months behind when the car was taken. When you file your bankruptcy petition, your lender is prohibited from selling your car. Our Bucks County bankruptcy lawyers will file a bankruptcy plan with two provisions regarding your car. First, you will continue to pay your lender $300 directly. Second, the default amount of $1,200 will be paid to your lender through your monthly bankruptcy plan payment. You will have to prove to the court that you can afford these payments.

Getting a Repossessed Car Back When You File for Bankruptcy in Pennsylvania

For many years, you could demand that a repossession company return your car immediately after your bankruptcy petition was filed. However, in January 2021, the United States Supreme Court, in City of Chicago v. Fulton, held that not returning a vehicle when a bankruptcy petition was filed did not violate the “exercise control” provision of the automatic stay section of the Bankruptcy Code. What does this mean? First, your lender is still prohibited from selling your car. Second, our York County bankruptcy lawyers might have to file an adversary complaint to have your vehicle returned. The disadvantage here is that it could take longer to get your car back. Practically, if a plan is in place to pay the default, the regular monthly payments, and adequate protection payments, if necessary, your car should be returned without the need for further litigation.

Experienced Pennsylvania Bankruptcy Lawyers Working for You

We want you to take advantage of the experience Young, Marr, Mallis & Deane brings to the table. Our knowledgeable West Chester bankruptcy lawyers stay abreast of the various trends and changes that could impact your bankruptcy. Our goal is to get our clients a fresh start. Call (215) 701-6519 to see how bankruptcy could help you.