Expert: Mark J. Markus- California Bankruptcy Attorney - 12/16/2009

Question
QUESTION: My husband and I had declared Chapter 7 bankruptcy. The case was discharged this past October. We reaffirmed our car. After the bankruptcy was discharged, I continued to receive NO communication from the creditor. I called them on November 23rd and told them that I'd like to start getting bills again, got my balance and past due amount. The person I spoke with never informed me that we in danger of being repossessed. Early this morning, they took the car. My husband and I received no bills, calls, or any mail to allow us any chance to make arrangements. They told us that they couldn't contact us because of the bankruptcy, even after we told them that I had requested corrrespondence. This seems like BS to me. If the bankruptcy was discharged two months ago, and I made an effort in communicating and received no response, can they still take the car?

ANSWER: I'm sorry to hear about your frustrating situation.

Repossession is a matter of state law and has nothing to do with bankruptcy.  The lien they have against your vehicle remained against the vehicle despite your discharge (and, in your case, there was no discharge of the vehicle debt anyway because you stated you did a reaffirmation agreement).

As to whether they properly repossessed your vehicle given the facts as you presented them, you will need to discuss that with an attorney who handles such matters in your State.

If they did properly repossess the vehicle, and you did in fact sign and have properly filed, etc. a reaffirmation agreement with the court, then you will also be liable for any deficiency judgment after sale of the vehicle.

http://www.bklaw.com/



---------- FOLLOW-UP ----------

QUESTION: Their (the creditor) logic in the lack of communication was that they could not contact us in any way in an attempt to collect the debt. If that is indeed the case, then wouldn't them taking the car be an "attempt to collect the debt"? If so, they contradicted what they told us about not being able to contact us. What I'm getting at is could they not contact us because they could not attempt to collect the debt, or just because they couldn't contact us? Not being able to contact us nearly two months after the bankruptcy was discharged, and after I requested correspondence, seems illogical.  

Answer
They are prevented from contacting you to collect on the debt during the bankruptcy case.  Once the reaffirmation agreement was approved by the court, there would be no restriction on them contacting you.  However, if you had not made the required payments to them, they were probably entitled to repossess the vehicle.  The only real issue is what notice they were required to give to you, and that depends, as I've said, on the laws of your State.