Blog

Repossessions

When borrowing money to buy a car, a most contracts grant the right to the lender to repossess the car. If a consumer fails to pay, it is called a “default.” In Virginia, being in default on a car loan for 10 days or more can give rise to a possible repossession.

In most cases after default on a car payment, the vehicle is repossessed without a court order. This is called a “self help” repossession. A self help repossession is allowed if it happens without a breach of the peace. Often the repossession happens in the middle of the night so that there is less chance of a breach of the peace.

Breach of the peace is any conduct that may cause problems or conflict betwen the parties. The repo company cannot break into a garage or closed building. 

The law in Virginia allows a person to object to the repossession before the repo company gets the vehicle hooked up. The objection can be made for any reason. Once a person objects, the repossession should stop. 

After a repossession, the lender must send a notice telling the borrower that they can pay to get the car back and that there is a deadline to do this before the car is sold.

This is not legal advice. For an opinion about what rights you may have in your situation, please contact BRCL.

Auto Debit Errors

Many of our bills can be set up for automatic payments from our bank account. Some companies even require that the payment be made through automatic payment. At some point in the contract (or check box on the website) the company must get authorization for an automatic payment from the bank account. It is easy. It is convenient. However, when the amount the company took is wrong or we want to stop the automatic payment, it can become very difficult to fix.

There is a federal law called the Electronic Funds Transfer Act (EFTA) that provides protection for the individual and rules that must be followed. The rules apply to both your bank and to the company receiving the payment.

The EFTA gives a person an absolute right stop the automatic payment from the bank account. In order to stop the automatic payment, the person can withdraw the  authorization. The person can withdraw authorization in writing that is sent to both the company and the bank. 

Withdrawing authorization is free and the bank should NOT charge when the person withdraws authorization. Sometimes a bank will require the person to do a “stop payment” procedure and charge a fee. Stop payment is a separate procedure and NOT required to withdraw authorization.

There are form letters available from the Consumer Financial Protection Bureau (CFPB) website to withdraw authorization. CFPB Form letters.

This is not legal advice. For an opinion about an automatic payment problem contact BRCL for a consultation.

Bankruptcy
FAQs

Q:  WHO ARE THE PLAYERS IN A CHAPTER 7 BANKRUPTCY CASE?

A:  The person who files bankruptcy is called the “debtor.”  The people or companies who are owed money are called “creditors.”

    The primary player in the Chaper 7 bankruptcy is the Trustee. The trustee is appointed to oversee the case and ensure the debtor and creditors are treated fairly according to the law. All of the property you own when you file a Chapter 7 bankruptcy is swept into the “bankruptcy estate.” This simply means that it is subject to the laws of the bankruptcy.  The Trustee oversees the bankruptcy estate.  The Trustee also holds a meeting early in the case when the debtor comes to answer questions under oath.

    The bankruptcy Judge may be involved if there are motions or disputes that need to be resolved.

Q:  WHAT ARE THE BENEFITS OF A CHAPTER 7 BANKRUPTCY?

A:  The main benefits of a bankruptcy are the “automatic stay” and the “discharge.” The automatic stay is the protective shield that comes up around you to keep creditors from seeking payment from you or taking your property. This allows you to take the time to get your financial affairs in order.

   The discharge is the court order at the end of the bankruptcy that erases the legal responsibility to pay most your debts. This is the main reason most people file for bankruptcy. The debts are wiped out and creditors can no longer seek payment from you. Certain debts may not be discharged like some taxes, some student loans, child support debt or spousal support debt.

Q:  WILL I LOSE ALL OF MY PROPERTY IF I FILE FOR BANKRUPTCY?

A:  Bankruptcy does not mean you will lose all of your property. Each state has property that is exempt (or protected that you can keep).  For example, in Virginia, the primary residence is protected up to $25,000 in value. The basic household items you own are protected up to a value of $5000. Clothing is protected up to a value of $1000.  The value of your car that you own (value of the car minus the balance of any loans) is protected up to $6000.

   Virginia also has a general wildcard exemption called a “homestead deed.” It has nothing to do with a homestead! It is an exemption that you can apply to any property. It can be money, a car or even value in a home or land.  The homestead exemption is at least $5000 and can be more depending on your age or if you have children.

   If all of the property you have is exempt or protected under the law, it is considered a “no asset” case because nothing is available. If you have property that is not exempt, the Trustee could sell the property to pay to the creditors.

Q:  IS CHAPTER 7 BANKRUPTCY AN EASY PROCESS?

A:   The Chapter 7 bankruptcy process is very detailed. The Trustee and the Court want to make sure that all information is provided before granting a discharge of debts. The debtor (the person filing) has a big job of gathering a lot of documents, including bills, the credit report, bank statements, vehicle titles, pay stubs, deeds, tax returns and proof of insurance. (This is just a partial list!). BRCL requires clients to complete a thorough questionnaire. It takes  a lot of time and effort to file a successful Chapter 7 bankruptcy.  Full and complete honesty with the Court is an absolute requirement!

This information is not legal advice. For a consultation about bankruptcy contact BRCL.