Chapter 13 And Car Payment
If your car is in danger of being repossessed, then you can use Chapter 13 bankruptcy to save it. The amount you owe on car payments depends on how much you have already paid and when you bought your car. |
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There are two factors that are determined. One is the value of the car, and the other is the loan amount. The value of the car is always lesser than the loan amount. In case you have paid the car’s value, then the remaining loan amount can be written off, and your car is saved from repossession.
However, there are different scenarios that have to be considered.
In case you have bought your car only 910 days prior to filing, then the entire loan amount has to be repaid. The good thing is that the interest rate will come down considerably on your car loan.
If your car is older than 910 days, then you will only need to pay the present value of the car.
A Chapter 13 bankruptcy has no allowances for car lease and you will have to make a repayment plan with your attorney. You will usually have two options. One is to assume the lease and continue with the payments. The second one is that you can surrender the car to the creditor. In such cases, the creditor will sell the car and use the sale proceeds for the balance owed by you.
These are some of the options for car payments under Chapter 13. To know more, you can read through the bankruptcy websites as there is plenty of information available online.
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