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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am a auto repair shop and completed the repairs on a 2007

Resolved Question:

I am a auto repair shop and completed the repairs on a 2007 vehicle on 10/5/08.The customer did not come to pay the bill so I filed a mechanics lien on 12/3/08.The customers attorney called me and said that I have to release vehicle to the customer without pay because the vehicle was in bankruptcy.Can you give me some advice
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 8 years ago.

When was the bankruptcy filed?



Customer: replied 8 years ago.
It was filed on 12/2/08
Expert:  socrateaser replied 8 years ago.

Unfortunately, if the customer/debtor listed the vehicle on the bankruptcy petition, then there is an automatic stay which prohibits anyone from taking any action against the debtor's property without the express permission of the court. So, if you want to enforce your lien, you will have to ask the court to find that the debtor committed a fraud against you by bringing the vehicle in for repair and neary simultaneously filing for bankruptcy.


This would probably not be worth the litigation costs, unless you've rebuilt the engine or something similarly costly.


If you hang on to the vehicle, then the bankruptcy trustee can sue you to have it released, and you will then have to defend on the same grounds as that which I have just described above.


The botXXXXX XXXXXne is that if your state jurisdiction requires that you file a lien to perfect your right to hold the vehicle, and that occurred after the bankruptcy filing, then you will likely lose your complaint. If your lien is perfected automatically under state law, at the instant you take the vehicle into the repair shop, then you might have an argument against the bankruptcy trustee -- but, the question remains as to whether it would be worth it.


You may want to just call the trustee (listed on the bankruptcy notice), and discuss your situation with him/her. Sometimes, if the trustee sees the debtor in a scam, he/she will "encourage" the debtor to settle with the creditor, at the risk of having the entire bankruptcy dismissed by the court.



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