Once a vehicle has been repossessed the debtor may still be able to recover it with a chapter 13 bankruptcy filing if the bankruptcy is filed prior the lender disposing of the asset. However, to recover the vehicle the debtor will generally need to provide proof of insurance with the lender listed as loss payee. Repossession/storage fees may have to be paid to the lender in some circumstances. Finally, case law in the Eastern District of North Carolina prohibits the chapter 13 plan from impairing the loan balance if the vehicle was repossessed pre-petition. However, despite certain drawbacks, a chapter 13 filing can be an option to consider if a vehicle has been repossessed.
