Rising Bankruptcies Could Impact Repos and Collections

Bankruptcy filings are on the rise. According to the latest AIS Bankruptcy Insights Report, filings are up nearly 9% year-over-year, with almost 50,000 cases in April alone. Chapter 7 bankruptcies, which often mean assets are liquidated, jumped nearly 13%, signaling more consumers are in serious financial trouble.

For repo agents, the key takeaway is that the “automatic stay” kicks in immediately when a debtor files for bankruptcy. That stay makes it illegal to repossess a vehicle or continue collection efforts until the court says otherwise. Missing that detail could result in fines, legal trouble, and damage to your business reputation.

Industry experts point to inflation, high interest rates, and tariffs driving more people toward bankruptcy — and the numbers could keep climbing. Staying ahead means monitoring accounts closely, confirming legal status before hooking a vehicle, and working with lenders who have strong compliance systems in place. Source: https://blog.cucollector.com