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WHAT DO I DO IF I AM BEHIND ON MY TRUCK PAYMENTS?
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WHAT DO I DO IF I AM BEHIND ON MY TRUCK PAYMENTS?

by | Jun 4, 2021 | bankruptcy, Chapter 13

Prior to the United States’ Supreme Court’s decision in City of Chicago v. Fulton 592 U.S. (2021), if your vehicle was repossessed, you would file a chapter 13 bankruptcy petition and provide the creditor with proof of insurance and get your vehicle back within a couple of days the latest.

However, you do not want to have your vehicle repossessed since under the present state of the law, it could take you a long period of time to get the vehicle back under the Supreme Court’s ruling.

The Supreme Court held in an 8 to 0 opinion ‘that mere retention of property does not violate the automatic stay in section 362(a)(3). That section stays: “Any act to obtain possession of property of the estate or of property from the estate or to control over property of the estate.”  Justice Alito, who wrote the majority opinion, said that section 362(a)(3) “prohibits affirmative acts that would disturb the status quo of estate property.”

What the Supreme Court held is that if a creditor does not return a vehicle that was repossessed, it is not an affirmative act that disturbs the status quo and is not a violation of the bankruptcy stay under 11 USC 362(a)(3). 592 U.S. at 7.

However, Justice Sotomayor wrote a concurring opinion that stated that the Supreme Court did not decide what other provisions of section 362 would require a creditor to turn over the debtor’s property.

Justice Sotomayor was concerned that the courts would have to enforce creditor’s obligations to deliver estate property to the debtor or trustee under section 542(a).  However, the major issue is that if a debtor’s vehicle is repossessed, he or she needs the vehicle immediately to go to work and if the debtor’s lawyer had to file an adversary proceeding, it could take substantial time to get the vehicle back which would be counter-productive to the debtor financially and with respect to time.

However, you can try to get back the vehicle under 11 USC 362(a)(4) or 11 USC 362(a)(6).

Section (a)(4) provides the following:  A petition filed under Section 301. . .operates as a stay on. . . “any act to create, perfect or enforce any lien against property of the estate.”

Section(a)(6) provides the following:  A petition filed under Section 301. . . operates as a stay on. . . “any act to collect, assess or recover a claim against the debtor that arose before the commencement of the case under this title.”

However, the US Supreme Court did not decide these issues and Justice Alito found that a broad reading of section 362(a)(3) would make section 542 “superfluous” In addition, it would make the two sections contradictory. See 592 U.S. at 5.

In essence until the Courts expedite the turnover process for an adversary proceeding, debtors may be facing a very difficult and expensive task in trying to get back vehicles after they have been repossessed.

It is the author’s advice that after the Fulton case, you cannot wait any longer to file a chapter 13 bankruptcy if you are behind on truck or vehicle payments since you need the vehicle to survive in this state. If you are worried about your credit, it is already affected.  If you are late on payments, a repossession will seriously impact your credit.

Also, the chapter 13 will allow you in a lot of cases to lower your auto payments since you can extend it for up to five years, lower the interest rate, and if the vehicle is over 910 days old, you can cram down or pay the fair market value of the vehicle.

At Taieb Law, we are urging you not to wait.  File the chapter 13 before the vehicle is repossessed since the US Supreme Court has dramatically changed the rules of the game where you used to be able to get back a vehicle almost immediately after filing bankruptcy.

If you are sick, stressed out, or losing sleep over your debt, we can help you save your property and get a fresh start by filing a bankruptcy for you.  For more information go to www.bankruptcywithcare.com or call us at (856)235-4994.

AGAIN, PLEASE NOTE WE ARE OPEN FOR BUSINESS TO HELP ANYBODY WHO IS IN FINANCIAL DISTRESS AND CAN HELP YOU EITHER IN OFFICE OR VIRTUALLY.  PLEASE ALSO NOTE THAT STEVEN N. TAIEB, ESQUIRE HAS BEEN VACINATED.

Steven N. Taieb, Esquire has been a south jersey bankruptcy attorney for 36 years and is board certified in consumer bankruptcy law by the American Board of Certification which is accredited by the American Bar Association.

We are a debt relief agency.  We help people file for bankruptcy relief under the bankruptcy Code.