Legal Question in Credit and Debt Law in Pennsylvania

When a car is repossessed and sold, the car lender can sue you for the deficiency. You have 3 options:

1) file a chapter 13 bankruptcy which will likely force them to return the car to you before sale and you can pay the balance over 60 months.

2) allow them to repossess and see if they claim the balance.

3) allow them to repossess and file a Chapter 7 bankruptcy to eliminate any unsecured obligations, including credit cards and personal loans.

I trust this answers your questions, but you should speak to experienced bankruptcy counsel ASAP and I would be happy to advise you on a free initial basis.

I'm not sure bankruptcy is the answer here, depending on the amount of any potential deficiency suit and judgment against you. It sounds like you are either resigned to (or flat out *want*) the repossession of your car. It will be sold to satisfy your outstanding debt. The sale price almost always is less than the total amount of the debt, which leaves a "deficiency" amount. The finance company can bring a lawsuit against you for this deficiency amount. If you do nothing, a default judgment will be entered against you for the full amount sought. If you actively contest the suit, however, you can probably settle for much less than the full amount sought.

If a deficiency judgment is entered against you, and you do not appeal it, there are various collection methods available against you. In Pennsylvania, your wages will NOT be garnished for this type of debt -- but your bank account could be seized. Hope this answers your questions.

Cary B. Hall, Esquire

Law Offices of Cary B. Hall, L.L.C.

121 East Chestnut Street, Suite 205

Souderton, PA 18964

T: (267) 663-9995

F: (215) 525-4364

[email protected]

http://www.carybhall.com