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If your car has been repossessed and you live in California, your life may get a lot more difficult. Or not.
Most people think that if they don’t pay the car loan, the lender will come to repossess the vehicle. Once that’s done, they figure it’s all over.
That’s exactly what my client thought when the tow truck was hauling away his Ford Explorer. Fast forward a few months and he knows better.
Now, so can you.
When A Vehicle Can Be Repossessed
In the beginning, there’s a car loan. You miss a payment and figure that a delay of a few days won’t make a difference. With so many cars in California, it’s not uncommon to be late by at least a few days.
What you don’t know is that under California law, the lender can repossess your vehicle without any prior notice to you so long as you’re as little as one day late on payment.
In fact, the lender can repossess a car in California whenever there’s a default in the terms of the contract. That includes not only missing a payment but also an insurance lapse.
It’s a good idea to read the contract carefully so you can find the landmines.
Who Can Repossess A Vehicle
Under California law, the car finance company as well as a registered repossession agency can repossess your automobile.
In order to have authority to repossess the vehicle, the company must be licensed or registered with the California Department of Consumer Affairs, Bureau of Security and Investigative Services. You should always ask to see the license before surrendering your car to a repo agent, and verify that license with the California Bureau of Security and Investigative Services.
Place And Time Of Repossession (And The Shakedown)
A repossession agent in California can’t come into a private building such as a garage, nor can they enter a secured or locked area such as a gated driveway, without the permission of the owner of the premises.
Your car can, however, be repossessed from unsecured driveways, streets, parking lots, and other publicly accessible areas in California at any time of day or night.
You don’t need to be present when the vehicle is taken, so if you park on the street and go to sleep there’s a chance the car may be gone when you wake up.
If you happen to be present when the car’s being taken, you may be able to save the car by paying the balance due rather than losing your wheels. If that happens then you have the right to receive an itemized receipt, and the repossession agent is required to forward your payment to the car lenders.
Timeline After Repossession
Once the car is repossessed, the clock starts ticking.
California law gives the repossession agency 48 hours to give you a Notice of Seizure that provides you with the name and contact information of both the legal owner and the repossession agency.
You must also be given an Inventory of Personal Effects that includes a list of your personal property in the vehicle when it was taken, as well as information about how to recover your property and the amount of storage fees. The repossession agency must store your items for 60 days, after which all unclaimed property can be discarded.
One caveat about your personal property. Anything that’s been installed or affixed to the car such as that awesome audio system or custom rims – you’re not getting that back unless you negotiate with the lender directly.
Selling The Car After Repossession
Once the lender has taken the car back, they’ve got to take some action before they sell it.
Under California law, the lender needs to serve you (either personally or by certified or first-class mail) you at least 15 days’ written notice of intent to sell the vehicle.
This Notice of Intent to Sell must be served within 60 days of repossession, and gives you the right to ask that the lender delay the sale for 10 days.
Your Right To Get The Car Back
Not only do you have the right to get the car back and reinstate the loan when it’s repossessed, but California law gives you the opportunity to redeem the vehicle and reinstate your loan at any time prior to sale.
California Civil Code forces the lender to reinstate your loan if all past due amounts are paid, unless the legal owner can prove that you did one of the following:

• Provided false information on your loan application
• Hid the vehicle in order to avoid repossession
• Damaged, or threatened to damage, the vehicle in a way that reduces its value
• Committed, or threatened to commit, violence against anyone involved repossessing the vehicle
• Used the vehicle in the commission of a criminal offense
• Your right to reinstate your loan contract is limited to once every 12 months, and twice over the life of the contract.

What Happens After The Car Is Sold?
Theoretically, your lender could get more for the car at sale than you owe on the loan. I’ve never seen it happen, but anything’s possible.
If the sale of the vehicle results in a surplus, the surplus amount must be returned to you within 45 days of the sale.
If the sale does not net enough to fully satisfy your loan and other amounts due, you will be liable for the deficiency balance.
In order to collect the deficiency, however, the lender has to sue you for the balance due. They need to serve you with the Complaint, you get an opportunity to file an Answer, and you can fight it out in court.
Remember – Repossession Is Not The End
If you fall behind on your car payments, California law doesn’t leave you hanging.
You can cure the default and keep your car.
If you lose your car, you may not have to pay any deficiency.
And if you are sued for a deficiency, there are ways to defend the case.
So long as you’re proactive, things may not turn out so bad.
Image courtesy drbrain
Your Options for Dealing With Repossession Under California Law was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.

A new court opinion issued by the 8th Circuit Court of Appeals declares that alimony is part of the bankruptcy estate and can be liquidated by the Chapter 7 Trustee unless a specific state exemption protecting the alimony award exists.  In re Mehlhaff, 2013 Bankr. LEXIS 944 (Bankr. D.S.D., Mar. 12, 2013).
Prior to filing bankruptcy in 2012, Laura Mehlhaff received an award of $200 per month alimony until her minor child reached age eighteen in 2014.  The opinion does not state whether the alimony would terminate upon the death of Laura or her ex-husband or upon the remarriage of Laura, but most alimony awards terminate upon the occurrence of either event.  However, it appears that South Dakota law provides that alimony is a property right and the Supreme Court of South Dakota in another case allowed a creditor to place a lien against an award of alimony.

if alimony is the kind of property right to which a lien can attach, it is the kind of property right that becomes property of the estate when a bankruptcy is filed.  In re Mehlhaff.

The bad news is that Nebraska does not have a specific exemption law protecting alimony, and it appears that the 8th Circuit may have overruled a prior Nebraska bankruptcy opinion declaring that monthly alimony payments were not part of the bankruptcy estate.  In re Loftus, Nebraska case number 97-82311.  In that case Judge Mahoney ruled that:

A plain reading of the language of the divorce decree in question indicates that each month [the debtor] is entitled to the payments only if she is alive, her ex-husband is alive, and she is not remarried. . . .The Court finds that the alimony payments from [the debtor’s] ex-husband accrue each month.

In other words, since the alimony accrues each month, there is not a present right to receive the future payments and the alimony is not a property right. 
The Nebraska Supreme Court has spoken on the issue of whether alimony is a property right.  “This court on numerous occasions has held that alimony and allocation of property rights are distinguishable and have different purposes in marriage dissolution proceedings, but they are still closely related in the matter of determining the amount to be allowed.”  McBride v. McBride, 211 Neb. 459 (Neb. 1982). 
The question for Nebraska bankruptcy attorneys and Trustees is whether the 8th Circuit’s opinion in Mehlhaff overrules Judge Mahoney’s opinion in Loftus.  What was once settled law in Nebraska is now no longer clear until a new opinion is issued or until the Nebraska legislature provides an alimony specific exemption law. 
Until this issue is clarified, I would advise debtors holding significant alimony awards in Nebraska to avoid Chapter 7 and opt for the safer waters of Chapter 13. 

Under both the Fair Debt Collection Practices Act as well as the state consumer laws of Washington and Oregon, a collector may contact certain 3rd parties in connection with a consumer’s debt. A collector may contact a consumer’s attorney, the original creditor and its employees and legal counsel, the consumer’s spouse or guardian, a co-debtor and the consumer’s parent if the debtor happens to be a minor.
It’s a pretty short list and if a collector is contacting someone you know who isn’t on this list, a violation of the Fair Debt Collection Practices Act has likely already occurred.
The original post is titled , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .

When people are in financial distress they feel that they cannot afford a “high priced attorney” to help them get a fresh start.  Unfortunately this leads many Debtors to seek out the help of the cheapest attorney they can find.  They call around and inquire about price and book an appointment with the attorney who promises them the lowest fees.  However, bankruptcy is a specialized field that requires an attorney who understands all aspects of the bankruptcy forms, practice and pitfalls.  Individuals who charge cut rate fees generally fall into one of two categories.  They tend to be either general practitioners who have an “experienced paralegal” running their bankruptcy preparation or attorneys newer to bankruptcy who believe that lower fees will help them break into the market.  Because of this, the attorney cannot afford to spend the time learning every aspect of their bankruptcy practice.  Additionally, they cannot spend enough time on each individual case to ensure that the client is fully protected.
The reason that this is such a huge danger to Debtors is that the bankruptcy code is full of pitfalls that are not always readily understandable by individuals in financial distress.  Newer attorneys and general practitioners generally do not understand that every question on the bankruptcy forms is being asked for a reason.  Every issue that comes up as a result of those questions needs to be addressed prior to filing to help ensure that the Debtor receives the best possible results.

To give an example, the other day I was down in court.  A new attorney at a “mill firm” had taken a case with a client who paid them $750.00 for their case.  The client had taken out a loan from a credit union for $3,000.00 within 30 days of filing.  Because the attorney did not understand that this was going to be an issue, the client was asked by the credit union to reaffirm the debt and pay it after the bankruptcy was complete.  If the client refused, the credit union would file an adversary case against the debtor and the debt would be found to be non-dischargeable.  Had the attorney caught this issue prior to filing the case, the Debtor could have been advised to wait until 90 days had passed from the date of the loan.  By waiting just 3 months from the date of the loan, the entire debt would have been discharged.  This means that the $750.00 fee that the attorney had charged had really cost the client $3,750.00.  A good bankruptcy attorney with a deep insight into bankruptcy laws could have been hired for far less and the client could have received a better result.
The next day I observed another case of malpractice.  An attorney at court had filed a case in which their client’s retirement had been rolled over into an annuity by their employer.  The attorney did not take the time to research the annuity to ensure that it could be protected under the current bankruptcy exemptions.  Because of this mistake, the attorney was unsure whether the Chapter 7 Trustee would liquidate the account.  The attorney had been paid $800.00 for the case, but the client was at risk of losing an additional $25,000.00 due to the attorney’s incompetence.
Finally, while I was in the hearing room waiting for my case to be called I overheard a Trustee asking a Debtor about $8,000.00 that the Debtor had deposited into her adult daughter’s account.  The mother was using the daughter’s account to store the money so that creditors could not get to it.  The problem. the trustee is likely to argue that the deposit into the daughter’s account was a fraudulent transfer to an insider and will seek to disgorge the entire $8,000.00.  If the Trustee is successful, the client will have paid not only the $750.00 that the attorney charged her, but also the $8,000.00 that she transferred to her daughter.
The bottom line is that a qualified bankruptcy attorney may cost a little more on the front end of the case, but is likely to avoid pitfalls that will cost you far more in lost assets and headaches at the back end of the case.