Are you behind on your car payments and in danger of repossession? Get help with your car payments with a chapter 13 bankruptcy. According to this story by the Associated Press, car payment delinquencies are at a higher point than they were when they peaked in 2010 during the Great Recession. If you are behind on car payments, chapter 13 bankruptcy can help avoid repossession of your car.
Once you file bankruptcy, your auto lender may not repossess your car. In addition to stopping repossession of your car, a chapter 13 bankruptcy gives you five years to pay off the car, which means lower car payments if your loan has less than five years to go. Additionally, most people get a lower interest rate in chapter 13, which is currently about 4.5% in the Oakland and San Francisco areas.
Even better, if you bought your car at least 910 days (about two-and-a-half years) before you file bankruptcy or you have refinanced the car loan, you can “cram down” your car payments, meaning that you only need to pay what the car is worth instead of what you owe. This usually results in a large savings, as most car depreciate in value very quickly.
If your car has been repossessed, you can get it back by filing chapter 13 if you file before the car is sold. Your lender must send you a 15-day notice letter before selling the car, so you will know if the lender is in the process of selling it.
Chapter 13 bankruptcy is a type of debt consolidation, so in addition to paying off your car loan, your other dischargeable debts like credit cards and medical debts will also be discharged (gone) when you complete your chapter 13 plan payments to the trustee and get your discharge.
If you are behind on your car payments, you are in danger of having your car repossessed. Contact a bankruptcy attorney today to see if filing chapter 13 will save your car.