Expert: Michael Brotherton - 6/13/2008

Question
I live in AZ and my husband and I are in the process of filing Chapter 13. We have not fully retained the lawyer yet. We are 4 months behind on an RV payment and 1 month behind on my car payment. If they come to repo the vehicles, and sell them for less than what we owe (probable) can we: 1. get the vehicles back because we are in the process of BK. 2. Have any sort of lien put on any of our property? 3. Can they put a lien on property that is paid for? 4. Can they come onto our private property to repo the vehicle? Thanks in advance for the help!!

Answer
These are all good questions. First, once you decide to file bankruptcy and inform the creditors of this they "must" stop collection activity. They may not repo collateral, file suit, or contact you at all. However, if you have not fully decided to file they do have the right to attempt to collect their money or repo collateral.

Answer to your questions:

1. Yes, in most case, if they repo collateral and you immediately file BK you may be able to get the property back. In the case of the RV, this is a recreational item and I would question whether you would be able to get it back. This is a question for your attorney.

2. If a creditor obtains a judgment they could possibly place a lien against property. You may be able to get the lien voided but you would have plenty of notice before this happens and if you file BK this action would stop.

3. YES under the same conditions as in question #2.

4. According to federal FDCPA law the creditor may not "breech the peace" to repo property such as a car etc. This means they cannot come onto your property without your permission. You may want to place a no trespassing sign in front  of your property. If they trespass, prosecute them.

If they show up with a tow truck ask them to leave. Without a replevin or civil warrant they cannot legally come onto your property although they may tell you they can. DO NOT SURRENDER VEHICLES WITHOUT A COURT ORDER.

Another thing, if the police show up with the repo guy and they tell you to surrender the vehicle, respectfully decline and advise them this is a civil matter and they have no jurisdiction in the matter. Without a court order the police are out of their authority and cannot require you to surrender collateral.

Of course you can avoid all this once you file the BK 13. But before you file look for other options or try to negotiate with the creditor for a fresh start. You would be surprised what they may be willing to do if you ask.

I hope this helps.

Good luck.

Mike