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Bankruptcy Law/Can I buy my car from a creditor during a bankruptcy?

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Expert: - 4/5/2009


Question
We filed bankruptcy in August.  It is April and it has not cleared yet and the financer for our truck has not filed their paperwork to come repo it yet.  We have not made a payment since last June right before we filed.  It does not run, it has body damage, it is not worth anything near what we owe on it (we owe roughly $10k and they will probably get $1k at auction.)  Is it possible to make them a lowball offer for the title rather than having them go through with repoing it through the court - ie,  if they accept the offer can we just drop the car from the bankruptcy?  If we did, we would still be under the limit for value of assets you can keep during a bankruptcy.

Answer

Leon Bayer
Bankruptcy Code Section 722 allows you to redeem,(buy out)the vehicle by paying the creditor the current value of the vehicle. You can contact them and arrange to buy it. If they turn you down, you will have to go into court on a Motion to Redeem under Section 722. I would expect a lawyer to charge around $1000 for the legal work involved.

If I was you, I would tell the lender I want to surrender it and ask them to pick it up.

Los Angeles Bankruptcy Lawyer Leon D. Bayer

Expertise

Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/

Experience

Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.

Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.

Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.


Education/Credentials
B.A., J.D.

Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000

MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.

Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.

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