Having your car repossessed could start a chain reaction of problems. If your car was necessary to get to work, transport your children to school, or just run daily errands, losing it could make making ends meet more challenging. Besides losing the car, you might have left personal items, such as a cell phone or tools, behind in the vehicle. Fortunately, in most situations, a creditor who might be entitled to take your car is not allowed to keep your personal property. Below, our Roseville, CA bankruptcy attorney from The Bankruptcy Group discusses getting your property back and the possibility of having your care returned by filing for Chapter 13 bankruptcy.
Car Repossessions in California
If you fall behind on your car payment in California, your lender can immediately arrange to have your vehicle repossessed. This is true if you only miss one payment. Additionally, your car could also be repossessed if you breach the loan agreement in any other way, for example, not keeping the vehicle insured.
Unlike other collection actions, such as collecting credit card debt or foreclosing on a defaulted mortgage, a car lender is not required to go through the court system to repossess your car. If you miss a payment, they can take the car back without your permission or informing you in advance.
Your car can be repossessed from any publicly accessible area, including your driveway, street, or a public parking lot. This means that your vehicle can be taken without your knowledge and you will have no official warning. Therefore, if you left your personal possessions in the car, including things such as your cellphone, charger, or any number of items that might have been in your trunk, they will be taken along with your car.
What Happens to Your Personal Items When Your Car is Repossessed in California?
When you purchase a vehicle with a loan, you sign documents that allow the lender to repossess the car if you fall behind on your payments. However, unless specified in the loan papers, the lender is not entitled to keep your personal property that was in the vehicle. Additionally, the lender must take reasonable measures to prevent others from damaging or taking your property.
Personal items in the car must be preserved and returned. This includes any loose items in the vehicle, such as tools, clothing, golf clubs, CDs, and cell phones. However, if you added fixtures or upgrades to the car, such as a stereo, speakers, GPS, custom rims, or any addition that requires tools to uninstall, they will be sold with the vehicle.
Under California law, once your car is repossessed, the agency that took your vehicle must give you a Notice of Seizure within 48 hours. The notice is required to list the name and contact information for the repossession agency and the lender. In addition to the notice, the agency must provide an Inventory of Personal Effects that includes a detailed list of all items found in the car. The inventory will also have information on how to retrieve your property and the cost of storage fees. In California, a repossession agency must store your personal property for 60 days, starting from the repossession date. Once the 60 days have passed, the property could be legally discarded.
Car Repossession and Chapter 13 Bankruptcy in California
If you walk out and find your car has been repossessed, you might not believe you have many options. If you can pay the overdue balance, you might be able to get your vehicle back. Of course, if you had the funds available, your car probably would not have been repossessed.
While your lender must make any personal effects left in your car available for pick-up, there is also a possibility to have your car returned. Your lender repossessed your car to sell it to recover the balance due on your loan. Once the car is sold, for usually less than is owed, you will still be obligated to pay the remaining balance. However, the lender is not able to sell the car immediately. If you act quickly enough and file for Chapter 13 bankruptcy, you could stop the sale, have your car returned, and pay the amount you are behind over the next three to five years through a bankruptcy plan. Depending on your circumstances, you might also be able to pay off or discharge other debts.
When you file for bankruptcy, a court injunction goes into effect that stops all collection actions against you, including the selling of a repossessed car. Once this automatic stay is in place, a lender that sells a vehicle violates the stay and could be required to pay monetary damages.
Just filing for bankruptcy will stop the sale, but it will take a few more steps to have your car returned. First, a lender may request permission from the court to move forward with a sale. To counter this request, a debtor will have to show that the car is necessary. For example, you might need the car to get to work so you could make your bankruptcy payments. In addition to showing proof that the vehicle is required, a debtor must show that they can afford their bankruptcy payment and their monthly car payment. These payments are in addition to the debtor’s ordinary monthly expenses. Our experienced Sacramento, CA bankruptcy attorney will assist you in filing and working with the repossession agency.
In most cases, if the repossessed car was not sold, it will be returned. However, there might be unexpected consequences associated with the retuned car, such as storage fees or other costs related to the repossession. In some cases, you might be required to pay additional money to your lender to cover the vehicle’s depreciation. These figures would often be worked out by our Folsom Chapter 13 bankruptcy attorney, counsel for your lender, and the court-appointed trustee.
If Your Car Was Repossessed, Call Our California Chapter 13 Bankruptcy Attorney Immediately
Having your car repossessed is frustrating. However, you have options. While you have 60 days to retrieve your personal items from the vehicle, if you act quickly, you could have the entire car returned. Chapter 13 bankruptcy provides petitioners the tools to stop the sale of their repossessed car. If your vehicle was repossessed, call our Rocklin Chapter 13 bankruptcy attorney immediately to discuss getting your personal items and car back. For a free consultation, contact The Bankruptcy Group at 1-800-920-5351.