Q: If your car was repossessed in montana is it still considered a secure debt when filing chapter 7 bankruptcy?
A:
The Bankruptcy Code provides that, once you file a bankruptcy case, you have the right to tender the return of the collateral in full satisfaction of the secured claim of the creditor's lien on that collateral (to the extent of the fair market value of the collateral on the filing date). Any remaining balance due upon that creditor's claim would be an unsecured claim.
That said, once the bankruptcy is filed, assuming the repo occurred shortly before the bankruptcy filing, and that the vehicle has not yet been sold by the creditor, a debtor can demand the return of the vehicle from the creditor. In that event, the creditor's claim is a secured claim, to the extent of the FMV of the vehicle. And a bankruptcy Discharge will not affect the creditor's vehicle lien, although any deficiency claim would be dischargeable.
A: No. A secured debt is a debt secured by the collateral in your possession. When the vehicle is repossessed by the Creditor, the collateral is in the Creditor's possession and the debt is no longer "secured."
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
