Legal Question in Bankruptcy in Iowa

We are filing bankruptcy, but have not actually filed yet but have retained a lawyer. We have more medical bills coming in so we cant file yet. We are two months behind on our car payments, have been making payments every month but cant catch up the back ones and have been working with the bank on this. Today they called and said because we are filing bankruptcy they are repossessing the car now. The car books at 24,000 and we only owe 11,000. when they sell the car do they have to pay us the amount over what we owe or do the jerks just get to pocket it? thanks


Asked on 2/22/11, 1:05 pm

1 Answer from Attorneys
Robert Luedeman solo practitioner

Bankruptcy is a little like pregnancy-you either are or you are not.

If you haven't filed yet, you haven't filed. If a car is repossessed and sold at auction, the finance company is **supposed** to repay you anything they receive over and above the balance owed plus fees. On the other hand, automobiles sold at auction rarely come close to book value at sale. If they receive less than what they're owed they could come back at you for the deficiency, which of course would be made moot by a bankruptcy filing.

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Answered on 2/22/11, 1:30 pm


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