The filing of a Philadelphia Chapter 13 Bankruptcy provides that car repossession is to be stopped.Creditors and Dealers almost always comply with the Bankruptcy laws. In our case the Philadelphia Chapter 13 Bankruptcy car repossession violation of the automatic stay wound up costing the Creditor car dealer $17,500.

On June 30, 2016, we filed a Chapter 13 Bankruptcy Case in Philadelphia which caused the Automatic stay under 11 U.S.C. Section 362 to go into effect immediately upon the filing of the Bankruptcy case. The car dealer repossessed the car after the filing of the Bankruptcy in violation of the automatic stay. We called and tried to get the dealer to return the car in compliance with the Bankruptcy law. We supplied the Chapter 13 paperwork to the creditor by mail, fax, and email demanding the return of the car but our requests fell on deaf ears.  We explained that the Philadelphia Chapter 13 Bankruptcy car repossession violation was serious.  The dealer’s employee responded that he was not giving the car back.

We then went after the car dealer, the employee and the finance company, and filed a Motion for Turnover against the Car Dealer and the Finance Company asking that the Court Order the return of the repossessed vehicle as well a Motion for an Expedited Hearing – which is where the Court may allow a hearing to be scheduled in a shorter period of time than is normal. The Motions were filed on August 5th. On August 8th The Honorable Chief Judge Eric L. Frank granted the Motion for an Expedited hearing and on August 11th we were in front of the Court.

The finance company called us prior to the hearing and informed us that the Car Dealer never supplied the auto paperwork so we only pursued the Car Dealer and the employee. At the hearing no one from the car dealer appeared. The Chief Judge ordered that the car be immediately turned over as the dealer and employee were in violation of the Chapter 13 Bankruptcy Automatic Stay. The dealer and the employee were held in Contempt of Court. In addition, the Judge noted that the Dealer’s employee would be subject to arrest if the car was not returned.  The Judge scheduled a hearing a followup hearing on the matter for four days later on August 15th to to determine compliance.  In addition the Court also Ordered that someone from the dealer must appear on August 15th. The vehicle was not returned prior to August 15th.

On August 15th the employee of the dealer appeared. When asked why he had not returned the car, the dealers representative replied that he was “checking things out to see if the bankruptcy was legit and to see what was going on”. The bright Judge was able to see right through the phony response that he was not being honest and candid with the Court.  The Judge Ordered the employee jailed until the vehicle was returned and a fine of $5,000 per day for everyday after August 15th that the car was not returned. The dealer’s employee was taken out in handcuffs. The Judge was incredibly fair and very kind in noting to the employee that if the car is immediately returned then he could be immediately released.  In that sense the dealer’s employee held the keys to his own release from jail as the Judge noted.

Within one hour the dealer’s employee had contacted the dealer to immediately have car returned and it was delivered in front of the Courthouse. In addition, Chief Judge Frank had also scheduled a further hearing for September 22nd to allow for sanctions against the dealer and employee for having failed to immediately return the vehicle. After a hearing on September 22nd at which the debtor testified, the dealer was ordered to pay the debtor $12,362.49 in damages, and legal fees in the amount of $5,164.20. The Court’s order to pay the damages was satisfied, The Court had also allowed us to pursue the matter further if the dealer did not make the payment on the Court’s Order.

The end of result was that the vehicle on which the debtor owed $14,400 would only cost the debtor about $2,000.00 as the dealer needed to pay for most of the cost of the car. This case is a perfect example of a Philadelphia Chapter 13 Bankruptcy car repossession violation of the Automatic Stay getting quick successful results. Anyone who ever questions the immense power of the Federal Bankruptcy Courts to produce quick results can look at the above case.  This is a perfect example of how a Judge can quickly fashion a remedy to deal with a creditor who flaunts his nose at the law.

For more information please see the Court’s excellent opinion.

When a client has Bankruptcy questions of when to file bankruptcy and what the Chapter 13 Bankruptcy rules allow for this case shows one result of what a bankruptcy filing provide. In addition Bankruptcy is an incredible remedy for most debts, foreclosure, bill problems, lawsuits, tax issues and other debts.  I also believe it will be a long time before we see another Philadelphia Chapter 13 Bankruptcy car repossession violation.  If you have questions of whether filing for Bankruptcy protection would be beneficial to you please give The Law Offices of David M. Offen a call at 215-625-9600.