NO, there are no more "DEBTORS PRISONS".
Let me get this straight. You filed B/K over 5 yrs. ago and the car was/is repoed recently? If this is correct, the car will be sold and the lender will want you to pay the balance still owed.
Most likely, the LENDER got a judgement for the balance due on the car loan about 6 years ago. They have likely sold the judgement to an attorney who will collect on the judgement.
When a vehicle is repossessed, it will eventually be sold at auction. Occassionally, the amount received from the sale is greater than the balance owed. On these occassions, the excess is sent to the debtor.
Randy, IF it sells for more than the unpaid balance, you should receive the excess.
There is nothing you can do till the car is sold.
Yes, if there was a deficiency balance owing after the car was sold at auction. Your creditor would have to sue you and obtain judgment in order to garnish your wages.
The lender will pursue collections for any unpaid balance for seven years from the date the car was sold after being repossessed. If the balance is large, they may pursue legal judgment. Obtaining this, they will have ten years from the date of judgment or last payment.
NO. It can be sold any way the bank wants it to be sold
If the lender has placed a judgment against you for the deficit balance (balance left after the car is auctioned/sold), then yes in most states, they can take the tax return and apply it to the balance owing.
The car goes to auction, then you owe the remaining balance of you loan + repossession and storage fees minus what the car was sold for at auction.