Car seizure: can bailiffs seize a car for debts and how to avoid this?

What gives bailiffs the right to confiscate a car and what is an arrest?

This right to serve as bailiffs is assigned by the Federal Law “On Enforcement Proceedings” (hereinafter referred to as the “FZ”) of 2021. This is called a “seizure of property.” Specifically, Article 80 of this Federal Law says the following:

1. A bailiff, in order to ensure the execution of a writ of execution containing demands for property penalties, has the right, including during the period established for the voluntary execution by the debtor of the requirements contained in the writ of execution, to seize the property of the debtor.

A car is formally a movable property. This also applies, like everything in this article, to motorcycles, mopeds, scooters, tractors and other types of personal equipment.

But it is important to understand that an arrest does not necessarily mean the seizure of a car. Bailiffs don’t always confiscate a car. Often it is in the custody of the debtor (that is, during the sale the debtor is allowed to continue to dispose of it). And sometimes they can even simply restrict the right to use a car (Part 4 of Article 80 of the Federal Law).

How is arrest imposed?

The procedure for seizing property is quite simple:

you have debts for which your car and other property may be seized,
for such debts, a court order is formed or a court decision is made with the corresponding writ of execution,
the writ of execution is handed over to the bailiffs,
The bailiff service initiates enforcement proceedings and issues an arrest order.

Arrest should not be confused with confiscation. Formally, these are different things, although in both cases the car can be taken away. Confiscation is a procedural measure within the framework of criminal law, and is carried out by a court decision in a criminal case, in contrast to arrest, which is carried out as part of enforcement proceedings, including in administrative and civil cases (fines, bank loans and others).

No one can just take a car based on the mere existence of debts! To do this, 2 important formalities must be observed:

Enforcement proceedings must be initiated against you (see the list of proceedings on the official website of the FSSP),
and as part of this proceeding, an arrest order must be issued (it is also displayed as a result of a search by full name on the bailiffs website).

Only based on the result of the decision within the framework of the proceedings, bailiffs can take the car in 2021.

You bought a car during marriage: what will happen to the property?

In bankruptcy, the provisions of Art. 45 of the RF IC, which provide for separate liability of spouses for personal obligations.

What will the bankrupt spouse get?

The car can be registered in the name of the husband or wife; this is the title owner. But registration for one will not cancel the rights of the other to half of the jointly acquired property. If a car is purchased during marriage, both spouses own it: it is community property. If any of them goes bankrupt, the car will be sent to auction, and the second will be compensated for the cost of his share.

After the sale, from the proceeds:

50% is the share of the debtor’s spouse; he is paid half of the proceeds after the auction;
legal expenses are paid;
7% of the remuneration to the financial manager is paid;
The financial manager pays the balance to creditors in order of priority.

The share is returned to the spouse in the amount in which he would have received the property in the event of division. As a general rule, this is 50%. If the spouses entered into a marriage contract, then in the shares determined by the contract.

The spouse also has a second option - to buy half of the car.

Let's explain with an example.

My husband goes bankrupt and the car we share is for sale. The manager put it up for auction for 350 thousand, and the winning bid was 400 thousand. After the auction, the financial manager first invites his wife to take advantage of the pre-emptive right: deposit 200 thousand rubles and become the owner of 100% of the car.

If she contributes money, the car remains in the family, and 200 thousand rubles appear in the bankruptcy estate.

If she refuses, AM goes to the winning bidder, who pays 400 thousand, of which the financial manager will transfer 200 thousand to his wife. The rest goes into bankruptcy.

Marriage agreement

important!

There is no point in concluding prenuptial agreements or getting divorced and dividing property on the eve of the procedure - banks successfully challenge such agreements in the Arbitration Court.

Judicial practice is on the side of creditors: if a person with loan debts gives his wife all his property, this is a gratuitous transaction. That is, the spouse simply gives his 50% to the other, depriving banks of the opportunity to collect loans through the sale of this property. The court terminates the agreement and divides the property in half.

Such disputes delay the procedure for six months, increase costs, and raise suspicions in the judge of the debtor’s dishonesty. Don’t come up with schemes; discuss with a lawyer which option is most profitable in your case.

Hide the car

Refusal to declare a citizen bankrupt: causes and consequencesRelated article

A common question is how to hide a car during bankruptcy?

The answer is simple: no way. The debtor is obliged to transfer the property to the financial manager.

If the car is registered to you or your spouse, it will be found. If you don’t have a car, you will be accused of dishonesty. As a result, the overdue obligations will not be written off: the court will declare you bankrupt, but will refuse to release you from your debts.

Can a car be confiscated for traffic fines?

Yes. For almost any unpaid fines, including those from auto-fixation cameras. But for this it is important to understand the terms after which the delay appeared, and how long it lasts.

These deadlines look like this:

the driver or owner is given an administrative decision with a fine and given 70 days to pay (10 for entry into force, 60 directly for payment), if the person has not appealed the fine,
after this period, the fine can be transferred to the bailiffs (and fines are not always transferred in practice),
the bailiff, who is responsible for the information about the debt, initiates enforcement proceedings on paper and is obliged to give 5 days for voluntary payment,
after this period, a decision may be made to collect funds from the debtor’s accounts - then the bailiff makes inquiries to banks (at random and not all) about the availability of the debtor’s accounts; if any are found, the money is debited from the card or accounts,
further, if it was not possible to collect the debtor’s money directly, then an arrest may be imposed, only within the framework of which the car can be taken away to be sold against the debt.

Important! If the amount of your debt is less than 3,000 rubles, then arrest cannot be imposed (Part 1.1 of Article 80 of the Federal Law). We are talking specifically about each enforcement proceeding - that is, about each unit of debt, and not the total amount of all debts.

This also applies to civil debts.

The process of selling a car by a bank

The financial institution sells the car independently. Low-cost cars are sold within just a few hours, so lenders are in no hurry to trust the sales process to the FSSP, which carries out sales through auctions of the Federal Property Management Agency.

Each bank has long worked out the process of selling seized cars. Vehicles are given to large resellers, for example, car dealerships of famous brands and those operating under the Trade-in system. The car can also be sold to an individual if there is a special program for the sale of used cars.

If you lose a civil lawsuit for collection

If your debt arose as a result of a claim against you by a third-party organization or individuals, then everything here is similar to traffic police fines, and the car can be taken away by bailiffs if the amount of debt is more than 3 thousand rubles.

The most common categories of debts for which FSSP cars are taken away:

recourse claim from the insurance company under compulsory motor liability insurance (a particularly common case is when the culprit did not provide a copy of the European protocol),
a claim for compensation for damage in an accident when the culprit does not have auto liability insurance, therefore, he himself is responsible for the damage.

Interesting to know!

If you owe a small amount, or you are only 1 month overdue, then the bank is unlikely to take the property. However, he can take the case to court. Therefore, try to solve the problem in time.
If you are a payroll client, then if payment delays occur, the bank unilaterally has the right to withdraw part of the funds from the wages credited to the account.
A vehicle that is collateral can be seized without a court decision if this is provided for in the contract.
The traffic police inspector has the right to pick up a car borrowed on credit and send it to a fine parking lot. The reason is delays. In this regard, in recent years the number of cars in impound lots has increased significantly.

We have described all possible cases when a bank can take a car without court to pay off a loan debt - the borrower just has to decide: negotiate with the bank to pay off the loan little by little and keep the car, or give the car back without burdening himself with loan obligations.

Can they take the car for a loan if you don’t pay it?

Yes. This is a type of civil case. Moreover, we are not necessarily talking about a car loan - if any credit, loan or other obligations are not repaid, the debt can be collected at the expense of the debtor’s car. But only bailiffs. And there is a difference between a simple loan and a car loan when the car is pledged as collateral.

For a simple loan, the car is sold (sold at auction) by the bailiffs themselves, and the proceeds are used to pay off the debt. The difference then goes to the debtor's account.

In the case of a car loan, where the car is pledged to the bank, the scheme is slightly different, but even here the bank cannot simply take away the car. First, the bank is obliged to go to court to issue a ruling to recover funds from the debtor. As in all the schemes above, by court decision the writ of execution goes to the bailiffs.

But the difference here is that the seized car, which was taken by the bailiffs from the debtor, is not sold by the bailiffs themselves, but is transferred to the bank, and the bank sells it as collateral. At the same time, the buyer can transfer money to the account of the debtor directly, but only in the same bank, and the debtor will have secondary access to the account - the priority will be to write off the debt at the expense of the seized and sold car as collateral.

It's just that a credit car is not that easy to sell.

Over time, a car loses value due to wear and tear. Sometimes the proceeds from the sale may not even be enough to repay the loan amount, interest and fines.

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Therefore, you don’t have to worry too much about having your car repossessed. If the borrower wants to keep the car, then he always has a chance to negotiate with the bank on debt restructuring or loan refinancing.

It is also possible that not all funds received from the sale of a car will be used to repay the debt. Money may remain, for example, if the borrower previously paid off the loan and part of the loan has already been repaid. Or the car was sold at a price higher than the loan debt. Then the difference is returned to the debtor.

You might also be interested in these articles:

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If a car is the only source of income

It would seem that the logic is obvious - how will the debtor pay off his debts if his only opportunity to earn money on these debts is taken away?!

The subtlety here is that if the car is the main (not necessarily the only) source of income for the debtor, then the bailiffs do not have the right to take it away. Article 446 of the Civil Procedure Code directly speaks about this.

But there is a limitation - if you have even a slightly expensive car, then they can already take it away. According to the law, for the car to be inviolable against seizure by bailiffs, its value should not exceed 100 times the minimum wage. For 2021 it is just over 11 thousand rubles. Accordingly, if your car costs more than 1.1 million rubles, then they will be able to take it away from you for debts.

How to avoid having your car seized by bailiffs?

Here we are talking specifically about the seizure of the car by the bailiffs, and not when it is pledged to the bank. The most obvious way to avoid losing your car if bailiffs take it is to get rid of it. Property that does not belong to the debtor will not be able to be taken away... With the exception of exceptions, there is an important subtlety in this issue.

According to the law, you can get rid of property in 2 ways:

sell a car,
give it away.

But you can also rent out a car, and for free (otherwise, under the lease agreement, you will have to pay money, which must be used to pay off debts).

The subtlety is that the sale or gift of a car can be considered fictitious and illegal - only for the purpose of hiding property from the bailiffs. To do this, the bailiff sues to recognize the transaction as fictitious, and then the car will be taken away from the buyer. And imagine if on your part and his part the sale was initially in good faith!

If the car was alienated after the start of enforcement proceedings and, even more so, after the FSSP issued a seizure order, then the transaction will be declared invalid with a high degree of probability. Especially if it is proven that you continue to use the car, as well as family or other ties between you and the buyer/donor/tenant.

Other possibilities result in the inability to use the machine:

disassemble the car into parts and provide the bailiffs with only the body for seizure as part of the arrest,
hide the car.

Something else useful for you:

A fine for average speed - is it legal and how to appeal?
What is the correct procedure for returning money for towing a car to an impound lot?
Is it possible and how to buy a credit car correctly?

At what amount of debt can bailiffs seize a vehicle?

The law does not stipulate a limit on the minimum amount of debt at which a vehicle can be seized. However, the court must take into account the principle of proportionality, i.e. The appraised value of the car should cover debts and legal costs, but not greatly exceed them. At the same time, if there is no other property sufficient to pay off the debt, the debtor can be forced to sell the car on his own and pay the required amount.

When making a decision to seize a car, the principle of priority must also be observed. First of all, bank accounts are checked and, if necessary, they are seized. If the debtor does not have them, then the property indicated by him is taken into consideration. Luxury items follow. Only after the listed property does the turn come to the car. The above does not apply to credit and pledged vehicles.