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Tampa Florida Timelines to Surrender a Vehicle in Bankruptcy have been Dramatically Reduced After the Tampa Division of the Middle District of Florida Adopted a New Model Chapter 13 Plan in 2010

Contrary to popular opinion, a bankruptcy debtor does not have to give up his or her vehicle immediately upon filing bankruptcy.

First, many debtors choose to keep their vehicles and can do so as long as they continue to make the regular monthly payment and sign a reaffirmation agreement to repay the debt.

Second, free and clear vehicles can be retained provided the values of the vehicles are within the permitted exemptions or provisions to pay to keep them is set forth in the Chapter 13 Plan.

Lastly, even if the debtor elects to surrender the vehicle, surrender is not immediate. However, the recent 2010 adoption of a uniform model plan in the Tampa Division, Middle District of Florida, has reduced the time period to turn in a vehicle. First, the new plan provides that the automatic stay does not apply in cases where the vehicle is listed as being surrendered in the Chapter 13 Plan. Therefore, the creditor does not have to go to the trouble, time and expense to file a motion to lift the automatic stay and seek a hearing as they did in the old days. This also saves the judiciary much time to review these motions. However, now the debtor may be forced to give up their vehicle that they have chosen to surrender 1-2 months earlier than was the norm. This model plan is only used for the Tampa Florida Division and other areas of Florida or around the country may be very different.

The above change in the uniform Chapter 13 Plan does not apply in Chapter 7 cases. In a Chapter 7 bankruptcy, 11 U.S.C. Section 521 requires that a debtor state his or her intentions with respect to the collateral and either reaffirm or authorize pick-up within 45 days of filing of the Notice of Intent (which is usually done at the inception of the case). If the debtor refuses to surrender the vehicle, the creditor can force its surrender by filing a motion for relief from the stay.

So put simply, a debtor may usually retain and continue to use a vehicle for a couple months in a Chapter 7 bankruptcy before they have to give it up while in a Chapter 13 the turnover can occur in as little as a week or two into the bankruptcy.

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