Q&A: Does the automatic stay in Chap. 7 and 13 bankruptcies apply to repo’s of collateral on secured loans?

Question by paralegaltechnik: Does the automatic stay in Chap. 7 and 13 bankruptcies apply to repo’s of collateral on secured loans?
I understand the secured creditor usually maintains their right to reposess collateral even if the debt is discharged. I’m wondering if the stay will help a debtor hold onto collateral during the proceedings…For example, a car they may need to get to work but that is in jeopardy of reposession.

Best answer:

Answer by webned
Yes , the automatic stay applies to everything, however, it is no major ordeal for a creditor to move the court to lift the stay concerning specific security, and such motions are typically granted. With respect to the car question, typically a debtor would not attempt to discharge the note on the car, or would ratify the debt to prevent the repossession.

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