Legal Question in Bankruptcy in Pennsylvania

Re: repossession

There are two methods for a creditor to obtain your car for failure to pay. If the creditor has a lien on the title, they can simply repossess it at any time after default. However, they cannot sell it until they have given you notice of your right to redeem it. That is the process by which, despite the repossession, you pay them the balance and are able to keep the car free of their lien.

The second method arises when a creditor does not have a lien. They must sue you for the balance owed, obtain a judgment and schedule a judicial sale of your vehicle and any other property you own. As with the repossession, paying the balance will free the levied assets.

If you are facing the first situation, the only ways to prevent the loss of your car are an amicable resolution with the car loan company or a bankruptcy. Chapter 13 allows you to repay the balance over five years. Also, you may be able to reduce the balance to the value of the car. For example, if the balance owed is $10,000.00, but the car is only worth $5,000.00, you may only have to pay $5,000.00 plus interest over five years. In most cases, the result is the ability to keep your car and simultaneously reduce your monthly car payments.

I trust this has been helpful but feel free to call or e-mail with further questions.