Under the bankruptcy law, your car is still property of the estate and can be recovered by filing a Chapter 13 bankruptcy since you are allowed to do reorganization.
You would have three choices in your Chapter 13 plan;
1) if the auto loan is over 910 days old, you can do a cram down to pay the replacement value of the vehicle plus Till interest over the next 3-5 years;
2) if the auto loan is less than 910 days old, you can pay back the balance of the loan plus Till interest over the next 3-5 years;
3) you can pay the arrears on the vehicle in the Chapter 13 plan and resume regular auto payments when next due.
As long as the vehicle has not been sold, you will get back the vehicle if you show the finance company proof of the bankruptcy filing and proof of complete auto insurance coverage.
In one case that Mr. Taieb had where the creditor would not return the vehicle, the finance company was sanctioned for failing to return the vehicle.
If you do nothing and let the vehicle be sold, then eventually the finance company will not only take the vehicle, but they will sue you for the deficiency (the balance due and owing after your vehicle is sold).
If you cannot afford the vehicle, the best option is to file a Chapter 7 bankruptcy (if you qualify) to help you get a fresh start and protect you from being sued by the finance company that repossessed the vehicle.
Thus, if you want to get back and keep the vehicle, you must file a Chapter 13 with urgency since time is of the essence. If you don’t want to keep the vehicle, then you should file a Chapter 7 to get a fresh start (if you qualify).
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 32 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 more than happy to discuss all your options and to see if bankruptcy is the best option for you.