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  1. #1
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    Jun 2018
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    Question Can a Car be Repossessed After a Bankruptcy Case is Dismissed

    My question involves a consumer law issue in the State of: Tennessee.

    I purchased a vehicle with over 100,000 miles from dealership in 2013, and it was included in Wage Earner in 2014. Vehicle has close to 200,000 miles now and Wage Earner has been dismissed, my credit report shows the Auto Loan account as closed in 2014. Will the finance company repossess the vehicle due to dismissal of Wage Earner case?

  2. #2
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    Default Re: Unpaid Status

    What are you referring to when you mention wage earner? Are you referring to a chapter 13 bankruptcy by chance?

  3. #3
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    Default Re: Unpaid Status

    Yes, "wage earner" bankruptcy is Chapter 13 bankruptcy.

    If the bankruptcy was dismissed before the repayment plan is complete, it is possible for the lender to resume efforts to collect the balance due under the loan and to pursue the collateral. Repossession is a matter of choice -- they may choose to try to repossess the vehicle, or they may prefer to leave the vehicle in the possession of the borrower while pursuing other options to collect the money that is still owed under the loan.

    If the repayment plan was completed but the vehicle was not included in the bankruptcy, the same applies -- but if the vehicle has been unprotected from repossession for several years because the buyer chose not to reaffirm the loan, it's not clear why they would act now after doing nothing for several years.

  4. #4
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    Default Re: Unpaid Status

    Vehicle was included in the Chapter 13. Thanks for your answer.

  5. #5

    Default Re: Unpaid Status

    If the amount of your car loan is greater than the value of your car (not an uncommon occurrence, because cars depreciate so quickly), you might be able to reduce the amount of your loan in Chapter 13 bankruptcy . This is called a cramdown. Essentially, you can reduce the amount you owe to equal the value of the car. Whatever is left becomes unsecured debt, and is treated like your other unsecured debts.

  6. #6
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    Default Re: Unpaid Status

    This is a dismissed case, so obviously that's not presently an option.

  7. #7
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    Default Re: Unpaid Status

    Quote Quoting Mr. Knowitall
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    This is a dismissed case, so obviously that's not presently an option.
    The question to ask is if the poster really meant dismissed rather than discharged.

  8. #8
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    Default Re: Unpaid Status

    Quote Quoting flyingron
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    The question to ask is if the poster really meant dismissed rather than discharged.
    That would not affect the cramdown issue. It's also a possibility that I directly addressed in my first post.

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