QUESTION
My car was repossessed before filing Chapter 7, is it possible to redeem a car that is worth nothing?
Asked on Oct 19th, 2012 on Bankruptcy - Utah
More details to this question:
My car was repossessed before I filed Chapter 7. I owe $8912 on the car, but according to NADA/KBB values, it is literally worth nothing. Would I still be able to redeem this car and if so, for how much? I don't expect to be able to just get the car back free and clear for nothing and I need my car back, even if it is a piece of crap, because I can't get another one right now.
5 ANSWERS
David John Tybor
The answer depends on whether the repossessing creditor still has the vehicle or has sold it. In bankruptcy you can "redeem" the item securing the loan by paying in full the amount it is worth. This option might not be available if the loan was made within the last 910 days prior to your filing bankruptcy. You can also possibly "reaffirm" the debt where your attorney may be able to negotiate a "modification" of the terms of the purchase.
Answered on Oct 24th, 2012 at 8:10 AM
Bankruptcy Attorney serving Alpena, MI
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Carl C. Silver Attorney at Law
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Yes, there are provisions in the Bankruptcy Code enabling a person to redeem a vehicle by motion offering the fair market value of the vehicle. The lender may or may not decide to contest the proponents valuation. Once the value is determined, the value must be paid in full in cash.
Answered on Oct 22nd, 2012 at 8:42 PM
You can redeem your car in a chapter 7. This value would be what a retailer would sell the car for, no matter how small. The catch is that you must pay for this in a lump sum. If your vehicle was already repossessed, then you need to act quickly to do this before the vehicle is sold. This sale can occur as soon as 10 days after repossession.
Answered on Oct 22nd, 2012 at 8:41 PM
That car is gone and bankruptcy will not help other than get rid of the financial obligation to pay for the car you no longer have.
Answered on Oct 22nd, 2012 at 8:41 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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You can redeem the car for its current market value (usually retail) so probably for more than nothing. You can file the motion to redeem based on the value and condition of the car and see if the creditor objects. If the creditor objects, you can negotiate a value at which to redeem the car.
Answered on Oct 22nd, 2012 at 8:41 PM