When you file for bankruptcy, an "automatic stay" goes into effect. This stay temporarily prohibits creditors from taking any action to collect their debt, including repossessing your car. However, bank may be able to get relief from the automatic stay and proceed with repossession.
Here are some situations where a bank may get relief from the automatic stay and repossess your car:
- If you fail to make the required post-petition payments ( payments made after your bankruptcy filing) on the vehicle .
- If you violate any terms of your bankruptcy case, such as failing to file required documents or provide necessary information.
- If you attempt to hide, conceal, or transfer the vehicle to avoid repossession.
- If the bank demonstrates a compelling interest in the vehicle that outweighs your protection under the bankruptcy stay.
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To protect your vehicle from repossession, it's important to maintain your car payment even after filing for bankruptcy. You should also cooperate fully with the bankruptcy court and comply with all the terms of your case. If you have any concerns about the possibility of repossession, consult with your bankruptcy attorney for guidance.
