When you file for Chapter 13 bankruptcy, you propose a plan to pay back some or all of your debts over a three to five year period. A bankruptcy normally discharges your personal liability on a car loan but does not wipe out the lender’s lien on the vehicle. So if you want to keep the car, you must continue making payments to your lender. Otherwise, the lender has the right to repossess the car.
In most cases, you pay off your car loan through your repayment plan. You make a monthly plan payment to the bankruptcy trustee and he or she sends a portion of that payment to your car lender. Depending on where you live, certain courts also allow debtors to exclude their cars from the plan and make regular payments outside of bankruptcy.
If you satisfy certain conditions, you can reduce the principal balance of your car loan to the car’s fair market value in Chapter 13 bankruptcy. This is referred to as a car loan cramdown. A car loan cramdown may also allow you to reduce the interest rate on your loan as well. When you cram down your car loan, you pay the lender an amount equal to what your car is worth through your plan. The remaining loan balance is treated as unsecured and wiped out when you complete your plan and obtain a discharge.
Once you find your lawyer. Go through all the aspects and details petaining to your situation. Best of luck!
@despritfreya wrote:Your question cannot be answered by a stranger on the Internet.
Keeping a luxury or high payment vehicle in the context of a Chapter 13 will be determined by local procedure in your district. Further, one does not "reaffirm" when doing a Chapter 13. The vehicle, if not surrendered, is paid either inside or outside the Chapter 13 Plan - again, based upon the rules in your district and/or the type of debt it is (lease vs. purchase).
You need to speak to a local bk attny for the answer to your questions.
Des.
@despritfreya Many questions can be answerd on this forum by people who have been thru almost any situation that arises in a BK or any other credit situation. We've been there done that. We try to help folks cause 1 of us will fit a certain question and have an answer because they had to go thru it. And keeping a car in Chapter 13 is not a rare occurence on here. So someone will come along and give an answer that will fit the OP's question. If we answered everyones question with dont come here cause we're strangers on the internet. Well heck shut the place down and I wouldnt have the scores or credit standings after a rebuild from BK as you see below.
