In a ruling, the Second Circuit decided that a creditor who repossesses a car or truck must return it to the owner if they file a chapter 13 before it is sold. If you car was seized by a third party creditor, you may be able to have your car returned through a chapter 7 bankruptcy or chapter 13.
Because state law decides the rights of an auto owner after a seizure or repossession, owners in some states may not have the right to get it back. But in Michigan where my firm is located, the creditor must return the automobile.
An attempt get back a repossessed car, without more, will rarely be enough to file a bankruptcy. But if an client has other reasons to consider bankruptcy – if he is behind on a mortgage or has a substantial amount of unsecured debt - they may want to consider it.
