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Bankruptcy can Stop a Vehicle Repossession or Recover a Repossessed Vehicle

  As a Knoxville area resident who is facing the threat of repossession , Clark & Washington may be able to help.  Even if you are several weeks or months behind, even if a repossession truck is actively searching for your vehicle right now, an emergency Chapter 13 bankruptcy filing can give you necessary breathing room to think about what you want to do and to save your means of transportation.

  Under Tennessee law, a car or truck finance company has the right to use “self-help” to enforce its rights if you default on your installment note.  The finance company’s right to use self help is subject to some limitations.  A repossession agent cannot breach the peace or use violence or force to take your car.  This means, for example, that the repossession agent cannot break into your locked garage to grab your car or truck nor can they forcibly remove you from behind the wheel.

  If a repossession agent uses force or inappropriate behavior to take possession of your vehicle, he and his client (the finance company) may be liable to your for damages.  If you think that you have been a victim of a wrongful repossession, please let us know and we will refer you to a lawyer who specializes in this type of case.

  Our firm can a prevent a repossession, and we can possibly help you if you call us as soon as possible following an actual repossession.

Stopping a Repossession from Happening

  Every vehicle finance company has its own policies and procedures with regard to repossession.  The installment contract and promissory note you signed when you financed your car or truck contains a provision that discusses default.  In most cases, your note goes into default if you miss a required payment.  Some contracts give you a five or ten day late payment window to cure the default but technically, as soon as you are one day late, your contract is in default.

  If you arranged financing with a large vehicle finance company like GMAC, Ford Motor Credit or Toyota Motor Credit, there is a good chance that your lender will not act aggressively if you fall behind.  If at all possible, you should communicate with your lender and try to work out an informal repayment plan.

  If this is the first time you have been delinquent and you are financing with a “first tier lender", you may have as long as two months before the lender decides to schedule your vehicle for repossession.

  On the other hand, if your payment history demonstrates a pattern of delinquencies, even a first tier lender will move quickly to seize your car.

  If you have financed with a “second chance” lender or with a buy-here-pay-here lender, you should not expect as long a grace period.  Lenders who work with credit challenged customers generally move to repossess within days of a delinquency.

  Regardless of your lender, you should not assume anything from the finance company if you fall behind.  We have seen top tier lenders grab vehicles when the customer is only a few days late.  Also do not expect to receive any notice of intent to repossess.  Because vehicles can be moved or hidden, the law does not require pre-repossession notice.

  Because of the credit counseling requirement of the new law, you cannot and should not wait to call us if you see that your loan will be going into default and that you will not have the money to cure the delinquency immediately.  Since you may need a day or two to obtain a credit counseling certificate along with pay stubs and other documents needed for filing, the sooner you call us the better.

Getting Your Auto Back Through Bankruptcy After Reposession

  Often an actual repossession triggers a call to our office.  If your car or truck has already been grabbed by the repossession agent, we can help you, but you must act quickly.

  Under Tennessee law, after a vehicle has been repossessed, the law requires your lender to mail you a “ten day letter.”  This ten day letter gives you notice of your right to redeem the vehicle by paying off the entire amount of the debt due on the car plus various fees and costs.  If you are unable or unwilling to redeem the car within this ten day period, the lender has the right to sell your vehicle at a public or private sale (auction). 

  You can reasonably assume that the auction value of your vehicle will be far less than its retail value.  Your lender can then sue you for the difference between the balance due under your installment contract and the auction sale price of the vehicle.  In our experience as repossession deficiency claim can amount to $5,000-$10,000 or more.

  Because repossessing lenders are usually quick about sending out the ten day letter, you need to move quickly once your vehicle has been repossessed.  Our firm has emergency repossession filing specialists on hand who can meet with you immediately, gather the necessary information to file a case and stop the running of the 10 day period.  When you file a bankruptcy case, the 10 day auction sale notice period stops and your lender may not take any action to dispose of your vehicle.

  Once your case has been filed, our repossession specialists can often convince the lender to return your vehicle without further action.  Our attorneys and support staff have established relationships with the law firms who represent most of the vehicle lenders who do business in Tennessee.

  You will need to show proof of valid insurance and we must show that your Chapter 13 reorganization plan is feasible.

  Sometimes, however, the lender and their counsel will refuse to return your vehicle voluntarily.  In such a case, we can file a Complaint for Turnover against the lender and ask your Bankruptcy Judge to order the lender to return the vehicle.

  Typically, we can get before your Judge to argue our Complaint for Turnover within about two to three weeks after we file.  You will need to show that you have full coverage insurance on your vehicle to get it back.


     A car or truck repossession in Tennessee can happen to any vehicle owner with a finance contract. 

     Do not assume that you have a grace period to make up missed payments.
Seek legal counsel as soon as you recognize that your vehicle is at risk. 

     You can avoid a reposession by seeking our counsel prior to the actual repossession.
But if your car or truck is repossessed, we usually can get it back if you contact us promptly after the repossession. 

     We will not be able to get your vehicle back if you cannot provide proof of insurance to the lender.


Remember: if you have ANY questions, please do not hesitate to call us for a free telephone consultation at (865) 977-0121.



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(865) 977-0121
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Disclaimer: This Website contains general information about various areas of bankruptcy.
It is highly recommended that persons with debtor/creditor problems seek the advice of an
attorney. The information on this Website is not intended to be legal advice and viewers
should consult with an attorney.

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