If Your Car Is Repossessed Do You Still Owe

If Your Car Is Repossessed Do You Still Owe – If your car has been repossessed due to late payments, you may soon learn that state and federal laws are strict in this area. Here are five tips for getting a car in Massachusetts.

In Massachusetts, car dealers must hold a repossessed car for 20 days before selling it. After this short holding period, a lender can sell the car. If the purchase price does not cover the full balance of the loan including repayment costs, then the lender may seek to collect the balance of the loan from you. This is called ‘deficient balance’. As a result, if the car is sold while you own it, you may not be able to get it back or owe money.

If Your Car Is Repossessed Do You Still Owe

This 20-day limit gives you a very short time to decide your options and make the best choice about how to proceed, so it’s important that you don’t wait to act.

My Car Was Repossessed. What Should I Do?

A good place to start is to contact your lender to find out what they are willing to do to release the lien on the car. Massachusetts law allows lenders to require payment of the entire loan balance with fixed rates, which is unaffordable for most people. However, some lenders may be willing to work with you and only ask for the amount you owe in the past and the maintenance fees.

If the money requested by your lender is not available, you need to quickly decide on a plan to get the car back.

An important difference between Chapter 7 and Chapter 13 is that the debtors in Chapter 13 have the right to keep their assets. This is not necessary in Chapter 7. As a result, if you try to get a car repossessed in bankruptcy, this may be your only option in Chapter 13 bankruptcy.

In most cases, an exchange request for a registered vehicle will be processed immediately. Our office often contacts the car lender to let them know that a bankruptcy case has been filed and we want the car. In response, most lenders will ask for proof that the vehicle is insured. Once this is approved, most lenders agree to return the vehicle to our customer.

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However, it is currently unclear whether this practice will continue due to a decision by the US Supreme Court.

Filing a bankruptcy case will stay (or block) any collection actions against you or your property. The exception is governed by 11 U.S.C. § 362, there are other restrictions.

A car lender’s refusal to repossess a repossessed car before filing for bankruptcy is a violation of section 362(a)(3), which prohibits the debtor from creating control over the property of the debtor. The court unanimously held that the “inheritance” of a car by a car lender does not violate this law.

However, other parts of the automatic residency rule were not considered. And while Justice Sotomayor concurred in the unanimous decision, she wrote a dissenting opinion stating that the same practice by the car lender could be infringing.

How To Avoid Car Repossession: The Loopholes

Of the Automatic Stay Act, sections 362(a)(4) and/or 362(a)(6). Section 362(a)(4) prohibits a debtor from taking any action to create, extinguish, or enforce a lien on real property, and section 362(a)(6) prohibits the Borrower does not do any work to collect, trade or return. . Demand the creditor.

Because the Supreme Court did not consider these sections of the law, a lender may violate these sections of the exception if it refuses to release a repossessed vehicle in after a bankruptcy case is filed.

The Supreme Court also noted that the Bankruptcy Code (Section 542) has a different rule regarding the flow of assets. Unfortunately, as indicated in Justice Sotomayor’s concurrence, if the creditor refuses to immediately transfer the estate and insists on a formal bankruptcy proceeding, that process can be weeks or months.

It is not clear at this time how lenders will respond to the Supreme Court’s decision in this case, but based on Justice Sotomayor’s approval, we hope that new agreements will continue under this situations. If not, we expect that there will be additional complaints about these other parts of the Automatic Stay Act. And our firm prides itself on actively enforcing these simple residency obligations.

Can I Get My Repossessed Vehicle Back?

When processing a foreclosure, there are certain steps that most lenders require and rules that must be followed.

Most importantly, this includes a written letter at least 21 days before payment that shows the current amount of the loan and avoids payment. If you have fallen behind on payments in the past and you receive this notice, please be aware that lenders are required to send this notice three times. If this is your fourth late payment, you may not receive this notice.

Even during a foreclosure, lenders should not break the peace and if the car is to be resold after acquisition, it should be sold at fair value. This is one of many requirements.

If your car has been wrongly repossessed, then you can consider making a claim for it. However, unfortunately, in many cases the complaint does not help to get the car back quickly.

Car Repossession: What To Do Before, During And After

In order to have a vehicle impounded, you must obtain a court order for it. Usually, even if the circumstances are very serious, the court is reluctant to grant this assistance.

To get a temporary or permanent injunction to prevent the sale, the court may ask you to prove that there is not enough money to pay you for the wrongful loss of the car. This is the case with real estate, because each asset is considered unique. Cars, on the other hand, are not. As a result, the judge can decide if the recovery is found to be illegal, then it is enough to give the money needed to replace the car.

Also, an injunction preventing a sale is not the same as an injunction requiring a transfer of property. The judge may be hesitant to grant further assistance of this nature.

As a result, the lawsuit can be used to get money as compensation for the loss from the illegal towing, but it is not useful in trying to get the car back.

What To Do If Your Car Is Repossessed

Every situation is different, and as you can see, state and federal laws regarding post-acquisition rights can be complicated. Ultimately, you’ll want to consult with an attorney who has experience handling these matters.

Brine Consumer Law is Worcester’s only law firm dedicated exclusively to fighting consumer debt in three primary areas: bankruptcy, debt protection claims and collections. Helping people solve debt-related problems is what we do. Call us today to discuss your options. A missed car payment may not be a big deal, but when you miss a payment, depending on your lender and your state’s laws, your car can be repossessed.[1] So, if you think you are missing a payment, contact the lender immediately to make a plan. To help you understand common loan policies and repossession laws, this article goes into detail about car repossession and what you can do if you find yourself in a car loan default. .

Depending on the laws of your state and your loan agreement, the foreclosure process can begin after you miss one car payment and then you are considered delinquent.

Although late payments cannot be guaranteed, contacting a lender to resolve the situation as soon as possible can help you avoid these negative effects on your finances and credit:

Car Repossessions Rise Amid Covid, With No Help, Relief For Consumers

Your account may be considered delinquent if you miss a payment. Default refers to payments being missed for anywhere from 30 days or more, although lenders have a different amount of time before they consider your account in default. – some may wait 90 days, some may wait, but some may wait less than 90 days. Delinquent payments can negatively affect your credit and make it difficult to get approved in the future.[1]

If you miss a car payment, don’t worry. Follow these steps to see if you can get back on track.

Check your credit report if you don’t see them. See the documents you received from the lender and find information about the loans, grace periods and the total balance of the loan.[1] If you can’t find your lender’s policy on late payments and when they’ll be added to your balance, call your lender and ask for details about the outcome. of late fees on your credit report.


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