Henry, No. 11-60118-13 (Bankr. D. Mont., January 19, 2011)
When you file any bankruptcy case, one of the biggest advantages is that your creditors are automatically prohibited from attempting to collect on your debts. That means they cannot repossess your car, foreclose on your home, or call you ceaselessly once you file for bankruptcy.
In this case, Jason Henry bought a car with a loan from the dealership. He then filed for Chapter 13 bankruptcy. The day after he filed, the lender that he owed money to for his new car called him and demanded that he return the car to them, because there had been a glitch with the financing and it had not gone through. He returned the car to them voluntarily.
The court ruled that not only did Henry not have to turn the car over to the lender, but they should never have contacted him to get it. Even though the financing never went through, attempting to get the car was still considered an act of collection, prohibited in bankruptcy. The great benefit to filing is that there is no room for negotiation for creditors. They are completely barred from recovering against you during your case. This is termed the automatic stay.
To read the full case summary for In re: Henry, 11-60118 please look here.
If you are dealing with any financial problems yourself or have any questions about bankruptcy please consult with a Tucson bankruptcy attorney.
Stephen M. Trezza
