Debt collection and bankruptcy laws have to carefully balance the needs of financial businesses with the needs of consumers. Businesses that lend to others generally expect timely repayment, while consumers want to receive dignified treatment, even if they fall behind on their financial obligations.
Sometimes, the law isn’t clear enough about what should happen when somebody has substantial debt or needs to file for bankruptcy. Recently, the Supreme Court ruled on a case out of Chicago that establishes stronger legal protections for companies that finance vehicle purchases.
What was the case that the Supreme Court heard?
The case that the Supreme Court heard had to do with bankruptcy and vehicle repossession and involved multiple different debtors. Each of them had multiple citations has passed new finds Ode to the city of Chicago. Eventually, the city repossessed their vehicles to compel them to pay. Instead, each of the owners individually filed for bankruptcy and then tried to claim that the city had violated their automatic stay by a repossession that occurred prior to their filing.
After a lot of contention in the lower courts, the Supreme Court eventually heard the case and determined that the city of Chicago did not violate the automatic stay by actions taken prior to the bankruptcy filing. In other words, the highest court in the country protected the right of creditors to repossess vehicles even if the owner eventually filed for bankruptcy.
Understanding debt collection laws can benefit both businesses and those struggling to maintain control over their finances.