Law Office of Timothy E. Wilfong, LLC

You Deserve a Fresh Start - Phoenixville, PA


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Law Office of Timothy E. Wilfong, LLC
20 S. Main Street, Phoenixville, PA 19460

Vehicle Repossession
 
Will my auto lender return my vehicle when I file Bankruptcy?
 


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Will my auto lender return my repossessed vehicle when I file for Bankruptcy?

Under Pennsylvania law, car owners have a 15-day right of redemption for repossessed vehicles.  This means that if an individual can pay the entire balance off on their car loan within 15 days of repo, then they have the right to force the lender to return their vehicle.  For most people, the right of redemption is not very practical, because if they were able to pay off their vehicle in the first place, then it would not have been repossessed. Sometimes the lender will try to work with the car owner and allow them to pay the arrears only within the redemption period, in order to retrieve their vehicle.  


However, the right of redemption within a Chapter 7 Bankruptcy works differently.  Instead of paying off the entire loan balance, car owners would only need to pay the appraised fair market value in order to redeem the vehicle.  This may still be expensive, but some lenders specialize in these so called "Redemption Loans," usually at high interest rates though.  Without invoking the right of redemption in a Chapter 7 Bankruptcy, the car lender will not return the vehicle, but on the bright side, the vehicle owner will not be liable for a deficiency between the auction value compared to the remaining balance left on the loan.     


Next, in the scenario when the owner of a repossessed vehicle files for Chapter 13, if they act quickly then there is a good chance that he or she can have the repossessed car or truck returned.


The vehicle owner would need to file the Chapter 13 within the 15 day redemption period.  That is why it is important to act quickly when your vehicle is repossessed. In a Chapter 13 Bankruptcy, either the entire vehicle balance, fair market value (cramdown value), or the arrears amount, depending upon the circumstances, must be paid through the course of a maximum 5 year payment plan. 

 
It is important to defend your legal rights because of the havoc a repossession creditor can wreak on your life.  Please call me at (610) 935-5555  or timwilfong@aol.com to review your case with an attorney.

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Law Office of

Timothy E. Wilfong, LLC

20 S. Main Street

Phoenixville, PA 19460

Phone-(610) 935-5555

Fax-(610) 680-3910

timwilfongesquire@gmail.com