Car lots such as “Tote the Note, Buy Here Pay Here, No Credit Check Lots etc ….”, have become very sophisticated in recent years and now use GPS Technology to allow them to remotely disable and enable the starter on customers vehicles that they sell on credit.  Get behind in your payments or miss a payment entirely, and you may be looking at going to get into your vehicle and it will not start.  They do this by placing a “cut-off box” within the vehicles’ computer system so that if the box receives the GPS signal from the car lot, the ignition will be disabled.  The 0nly way to get the car going again is generally to make a payment or otherwise work something out with the car lot, which almost always means money.

The question becomes what happens if you file bankruptcy when facing the situation above.  Fortunately, Section 362 of the Bankruptcy Code gives you protection in these circumstances.  Section 362 deals with the Automatic Stay that goes into effect immediately upon filing a Bankruptcy Petition.   This means any attempt by a creditor to collect on a debt is stopped.  The Court would consider the continued disabling of a Bankruptcy filer’s automobile by use of the Starter Disable Device to be an attempt to collect on the pre-petition debt owed to the car dealer and a violation of the Automatic Stay.  The use of the Starter Disable Device would also be interferring with Property of the Bankruptcy Estate which the Bankruptcy Code prohibits in situations like this.

If you file a Chapter 7 Bankruptcy Petition, the protection of the Automatic Stay may be very short lived as most Chapter 7’s only last a little over 90 days and unless the Bankruptcy Trustee took an interest in the vehicle, the Automatic Stay would end and you would be back at the mercy of the car lot and facing repossession or be enabling of the Starter Disable Device all over again.

Chapter 13 might be a better solution as the same protections of the Automatic Stay go into effect and in some cases the Chapter 13 Plan may last as long as 5 years and the Automatic Stay would be in effect this entire time.  If you completed your Chapter 13 Plan, the car would be paid for, in most cases, and then the Starter Disable Device would be a moot point.  Of course, there are exceptions that can take place in both Chapter 7 and Chapter 13 whereby the creditor gets Relief from the Automatic Stay and is allowed to pick up their vehicle or use the Starter Disable Device until they do complete the repossession.

We would be happy to look at your situation and see if Chapter 7 or Chapter 13 might work for you and get your vehicle running again.