Car Repo: Can I Eliminate Repo Debt in Bankruptcy?

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Question: My BMW got repossessed a week ago. I was only 2 months behind on my BMW payment and the bank came and took my car. I told them I would pay but I needed some time to get some money. My father said he would give me a loan. My boss said he'd give me some money. I saved for the BMW for like two years. It was the Ultimate Driving Machine for the 6 months I owned it.

The car repo people said that I still have to pay them money. They said they would sell it and I'll owe them some money. But I don't want to pay because I can't drive the car. How much do I owe BMW? Can I get rid of it in a bankruptcy? I need to go bankrupt.

Answer: After a car repo, the finance company can seek to collect on a deficiency. That is, they can sue you for the difference between what you owe on the car and how much they sell the automobile for.

Here is an example: You owe $20,000.00 to the bank for the car. They come and repo the car. They sell the car for $12,000.00. You would owe the bank the difference between the two amounts, which is $8,000.00.

You can eliminate that debt by filing for bankruptcy. If you file a chapter 7, then the debt is fully discharged. Many people file bankruptcy to get rid of debt that is owed because of a repo.

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