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A.J.
A.J., Attorney
Category: Bankruptcy Law
Satisfied Customers: 4300
Experience:  Experienced consumer bankruptcy attorney.
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I am currently in a Chapter 7 bankruptcy pro-se for 4/5 months

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I am currently in a Chapter 7 bankruptcy pro-se for 4/5 months now, and behind on my car payment. I indicated in the case that I wanted to reaffirm the debt. The creditor, Capitol One Auto finance has indicated that they have the car "out for repo". I spoke with them about paying a portion, and taking the remaining portion and putting it on the back of the loan, and their servicer said no, and Capital One Auto won't speak with me unless I drop my bankruptcy case. There'd be no risk to them because if I didn't make the payment they wouldn't have to worry about me filing for bankruptcy because I can't for another 8 years. My question is don't they have to request to be lifted from the automatic stay in order to repossess the car?

SavyLawyer :

Hello, and thank you for contacting Just Answer. Give me just a moment to review your question.


 

SavyLawyer :

Hello, and thank you for contacting Just Answer.


 

SavyLawyer :

Generally, yes, a creditor who is subject to the automatic stay (And that would include any creditors with secured consumer debts that were listed in the bankruptcy petition) cannot take any action to collect on the debt, including seizure of a secured asset, unless they receive a reprieve from the stay, or the stay is lifted or expires.


 

SavyLawyer :

It is important for a bankruptcy debtor to know that the automatic stay generally expires for real property (cash, personal possessions, a vehicle) at 45 days from the date of the stay unless a debtor requests that it be continued.


 

SavyLawyer :

So, if more than 45 days have passed, it is possible that the stay has expired, leaving a creditor free to enforce the secured interest against personal property.


 

Customer:

Yes, it has been more than 45 days. So at this point, I have no recourse other than to let them take my car since I can't pay the full amount?

SavyLawyer :

Potentially, yes. Once the stay expires, a secured creditor in personal property can enforce the security interest. A creditor at that point is not required to agree to a reaffirmation agreement or redemption of the vehicle. If the payments are behind and the debtor cannot pay, the creditor may be able to go after the vehicle.


 

SavyLawyer :

The debtor could request that the stay be extended, but will have to show good cause for doing so.


 

Customer:

Ok. What would be considered good cause?


 

SavyLawyer :

I'm not sure that there is an established definition, let me see if I can find any favorable case law.


 

Customer:

Great, and thanks!

SavyLawyer :

You are welcome. Give me a few minutes, I am going to flip through the statute and caselaw.


 

Customer:

No problem. Appreciate you going a little further on this issue for me.

SavyLawyer :

Ok, I am not finding a specific rule that states when a stay can be extended in such a situation, it would likely just have to be a showing that absent the stay, either the debtor or the bankruptcy estate will be harmed unduly. Again, I am not finding specific caselaw on the issue. What I can give you is the portion of the bankruptcy code that causes the stay to expire for something like a car, and you could take the issue to a local bankruptcy attorney to draft a motion to extend the stay. The code states:


 

SavyLawyer :

(h) (1) In a case in which the debtor is an individual, the stay provided by subsection (a) is terminated with respect to personal property of the estate or of the debtor securing in whole or in part a claim, or subject to an unexpired lease, and such personal property shall no longer be property of the estate if the debtor fails within the applicable time set by section 521 (a)(2) (A) to file timely any statement of intention required under section 521 (a)(2) with respect to such personal property or to indicate in such statement that the debtor will either surrender such personal property or retain it and, if retaining such personal property, either redeem such personal property pursuant to section 722, enter into an agreement of the kind specified in section 524 (c) applicable to the debt secured by such personal property, or assume such unexpired lease pursuant to section 365 (p) if the trustee does not do so, as applicable


 

SavyLawyer :

In plain english, the stay expires where the party fails to redeem or reaffirm the debt within the time required by law.


 

Customer:

Great! Thank you so much for going the EXTRA mile for me. It is greatly appreciated.

SavyLawyer :

You are very welcome. Would you mind re-rating, it does not seem to have gone through?


 

Customer:

No problem.

SavyLawyer :

Ok, one more time. Sorry, I am not sure why it is stuck.


 

SavyLawyer :

Alright, it's still not working. Would you mind stating what rating you are giving, and I will request that it be done on our end?


 

Customer:

I am giving you an EXCELLENT rating. You were thorough, informative, and were willing to go the extra mile which is greatly appreciated!

SavyLawyer :

Thank you, XXXXX XXXXX luck to you.


 

Customer:

Thanks!

SavyLawyer :

You are very welcome.


 

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