The video below talks about the automatic stay in a Chapter 13 bankruptcy case. This is basically the protection from creditors that the filer is seeking.
What is the Chapter – rather what is the automatic stay and is applicable in a Chapter 13? I know we talked of one of our other shows with respect to Chapter 7. We talked about the automatic stay. But is it applicable here, to Chapter 13 as well?
David Siegel: It is. The automatic stay is what you get upon filing which basically tells creditors they cannot take certain collection actions. The automatic stay is everything the client is looking for. It stops the foreclosure dead in its tracks. As long as the sheriff’s sale hasn’t happened, you can save the house. It stops and auto repossession. If you filed a bankruptcy case in the morning and the repo man comes in the afternoon to hook up your car, you’ve got the automatic stay. You’ve got the protection; you’ve got your case number.
Jesse Barrientes: What if they yank it anyway?
David Siegel: Well, if they yank it anyway, you can get it back under the Thompson case. There is some issue as to whether or not the car can be given back if there’s no stay or if there’s not adequate protection payments. But they can’t hold the car hostage based on failure to pay or failure to show proof of insurance. They have to give the car back. It’s compulsory. And then if you don’t make payments or if you don’t provide proof of insurance, they can then petition the court to repossess the vehicle legally.
Jesse Barrientes: And they have to do that through the court. Let me ask you one question that occurred to me. Apparently, sometimes when people buy a car, people who don’t have the best credit, there’s a device that’s in the car that allows the dealer to shut it down. So what happens if I filed my bankruptcy and I’ve got my stay, does that prohibit them from shutting it down, too?
David Siegel: It does. You own that vehicle until such time that it sold at an auction. So if any time prior to the sale of the vehicle you file a Chapter 13, under the Thompson case, that vehicle must be returned to you provided there’s a stay in place. Now, there’s some other issues that come along with it moving forward that you want to make sure you have things in place but you will be able to protect that vehicle. It’s your property still until the court determines that is no longer your property or that the creditor has a right to repossess it legally. You will get that vehicle back if not permanently, at least temporarily.
