It is possible to get car back even after it is repossessed.

How to save your car

1.    In re Denby-Peterson, 576 B.R. 66 (2017)



In the New Jersey case Denby-Peterson, the Bankruptcy Court considered whether a repossessed car is returned after the owner files bankruptcy. In that case, Ms. Denby-Peterson bought a 2008 Chevrolet Corvette in July, 2016. The car dealership loaned her $53,382.33 to buy the car. She was to pay $200 per week with an interest rate of interest rate was also 23.99%. Over 28 weeks, Ms. Denby- Peterson paid $9,200 on the loan including a $3,000 down payment. She also paid for repairs. But, she did not pay all the money due. The bank repossessed her Corvette in early 2017.

Ms. Denby- Peterson filed for chapter 13 bankruptcy, and she asked the court to order that the bank return the repossessed car. The Court concluded that if a car is reposed before filing bankruptcy, then the owner can ask for car back or may ask the court to order the turnover. In New Jersey, a bank holding a repossessed car will often ask the owner provide proof of insurance naming it as loss payee. In other words, the bank would be paid if the owner crashes the car. If the bank makes this request, and the owner complies, then the owner gets the car back under New Jersey law. New Jersey law also requires that the bank give back any personal property in the car upon request.

In Ms. Denby-Peterson’s case, the Court granted her Motion for Return of Repossessed Automobile. The Court ordered the bank to return to vehicle to Ms. Denby-Peterson.



2.    Carr v. Sec. Sav. & Loan Ass’n, 130 B.R. 434 (D.N.J. 1991)


In Carr v. Bank, a New Jersey bankruptcy court considered whether the bank can keep a repossessed vehicle after the car owner files bankruptcy. Ms. Cheryl Carr owned a Ford Escort but fell behind on her payments. The bank repossessed the car on March 4, 1990, and Ms. Carr filed Chapter 11 bankruptcy the next day. She asked for her car back, and the bank asked for proof of insurance. Ms. Carr provided the insurance on April 6, 1990, but the bank did not return the car immediately. Instead, the bank asked the bankruptcy court for permission to keep the car. The Court denied the bank’s request/ The Court determined that the bank’s failure to turn over the car back to the owner was a violation of bankruptcy protection. The Court fined the bank and ordered it to return the Ford to Ms. Carr.