CAPITOLA, Calif. – Bay FCU returned a modified van for the disabled son of a member that had been repossessed.
The dispute over the wheelchair-equipped van began in March 2008 when the mother filed for bankruptcy. Medical expenses and a period of unemployment for her husband led her to the filing. The filing was dismissed on July 1 this year due to her failure to make payments under the plan to get out of bankruptcy. A few weeks later, the van was repossessed.
The member re-filed for Chapter 13 in early August and was in the process of extending the automatic stay that protected the van from creditors when credit union sold the van. The case was taken to court, where Bay Federal sought relief from the stay. Instead of being granted relief, a U.S. bankruptcy judge ruled in a hearing on Oct. 7 that the sale of the van was void as it was done within 30 days of the re-file, when an automatic stay was supposed to be in effect.
The same judge approved an agreement last week releasing the van to the Benites family and wiped out the remaining payments of about $25,000. The conditions of the agreement are confidential.
