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Bankruptcy Doesn’t Require Return of Repo’d Car: Third Circuit

Oct. 28, 2019, 6:02 PM

A creditor doesn’t immediately have to return a repossessed car of a debtor who declares bankruptcy, the Third Circuit said in a ruling that widens a fissure among federal appellate courts.

Such refusal by creditors doesn’t violate the automatic stay that protects debtors and their property when they file bankruptcy, said the Oct. 28 decision by the U.S. Court of Appeals for the Third Circuit.

Creditors’ handling of repossessed cars has been a contested issue, as finance companies and cities impound cars for unpaid loan payments and parking tickets from consumers who eventually declare personal bankruptcy. The U.S. Supreme Court...

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