SCOTUS to Decide Fate of Repossessed Cars After Bankruptcy

The U.S. Supreme Court will decide whether a creditor that has lawfully repossessed or impounded a car is violating the automatic bankruptcy stay if it retains possession after the owner files bankruptcy.

Federal appellate courts have ruled both ways on the question, creating a split that only the Supreme Court can resolve, absent further legislation from Congress.

The Supreme Court’s review, granted Dec. 18, will affect how financing companies and municipalities across the U.S. deal with bankrupt consumers’ cars. They’re watching to see if they are required to return repossessed or impounded vehicles on demand or can maintain possession without ...