NJ Bankruptcy Law Firms

66 East Main Street, 3rd Floor
Little Falls, NJ 07424
NJ Bankruptcy Law Office Logo (Transparent) dictating Ralph A. Ferro Jr., Esq's Law Practice

Does Bankruptcy Affect Vehicle Repossession?

New Jersey Bankruptcy Lawyer!

With 30+ Years of Proven results!
"I personally meet with You and represent You!"
"I have never Lost a Chapter 7 Bankruptcy Case"
"Experience = Results"
About Ralph A. Ferro Bankruptcy Lawyer

Does Bankruptcy Affect Vehicle Repossession?

How does bankruptcy affect vehicle repossession, getting behind in car payments

Written and Verified by Ralph A. Ferro, Jr., Esq.

Bankruptcy protects against Vehicle Repossession.

When you file for bankruptcy, your lender cannot repossess your car if you would like to keep your car.   There is an automatic stay (like a force field) around your debts.

You decide whether you want to keep or surrender your vehicle – not your lender.

  • You have options when you file for bankruptcy: 
  • Know How Bankruptcy Affects Vehicle Repossession:

Chapter 7 – Keep your Vehicle 

Sign a reaffirmation agreement wherein you agree to keep your car and continue with your agreement and payments with your lender.    As long as you are making the payments, your vehicle will not be repossessed.


Surrender your car.   You may have poor payment terms.   For example, your payments are high and your car is not worth the value you are receiving. Your lender takes the car back and you list the debt in your bankruptcy petition.

Chapter 13 – Keep Your Vehicle

Most of the time, you do not have to sign a reaffirmation agreement.   Your plan will address any past due payments and you pay your regular car payment outside the Plan.

If your car gets repossessed and you want to get it back, I can work with you to get your car back quickly.

You can decide to surrender your car.

If you are in a position where you are having difficulty making your monthly payments, e.g. your car payments, call me for a free bankruptcy consult.  You do no want to be in a position, that you come out to drive your car and it has been repossessed.

Here is an example wherein the creditor did not follow the rules and they were penalized.

There is bankruptcy protection and there are consequences for creditors ignoring the bankruptcy code rules.

Know your rights. Debtors have rights.


  • Debtors purchased a Cadillac Escalade
  • Key factor in the purchase was the ability to accommodate a lift and wheelchair.
  • Paid part in cash; financed the remainder.
  • Agreed verbally to make bi-weekly payments to the auto sales company.
  • Missed two payments before filing for bankruptcy.
  • Filed Chapter 13 relief on December 8; the next payment due to the auto sale company was December 9.
  • The Debtors’ counsel notified the auto sales company of the bankruptcy petition, the car payment was in the Bankruptcy filing, and would be paid in full.
  • Auto Sales Company repossessed the car on December 10.
  • Debtors’ attorney spoke with the manager of the auto sales company advising of the bankruptcy protection, valuable items were needed from the car (a scooter and wheelchair were in the car).
  • Manager refused to return the car or its contents.
  • The debtors filed a 4-count complaint against the auto sales company for willful violation the automatic stay and other relief.
  • Auto sales company did not appear in Court or respond to the complaint.

BK Court Ruling:

  • Defendant (auto sale company) wrongfully repossessed the vehicle.
  • Defendant’s actions constitute egregious conduct and warrants a substantial award of punitive damages.
  • Further uncooperative behavior took place, the Defendant disposed of the car when the Debtors began the adversary proceeding.
  • Failing to appear in Court, the Defendant exacerbated the damages to the Debtors.
  • Court award: Actual damages of $23,100; attorney fees of $4,040; and punitive damages of $25K.

Creditors cannot ignore Bankruptcy Court rules or the laws regarding bankruptcy protection.

Are you Falling behind in Car Payments?

I am here to help you with your debts.   A free bankruptcy consult is available.    Call me today:   

  • Ralph A. Ferro, Jr., Esq.   (201) 446-5904.   
  • I will speak with you personally and meet with you personally. 
  • You are never passed on to an associate. 
  • I am with you from the time you meet with me and through your entire case and beyond.