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By filing a Chapter 13, it may be possible to keep your car AND significantly reduce the total amount that has to be paid on an auto loan by doing what's known as a cramdown. To cramdown a vehicle loan, you must have purchased and taken an auto loan out at least 910 days (approximately 2.5 years) prior to filing of the Chapter 13. A cramdown allows an individual to reduce the secured debt amount to the current market value of the vehicle. The difference between the secured debt amount and the total amount owed is treated as an unsecured debt. In Chapter 13, unsecured debt is typically paid back at a very small fraction of what is owed and the unpaid unsecured debt amount is discharged upon successful plan completion.
Making Your Auto Loan More Affordable
An auto repossession occurs when the lien holder attempts to take a car back after payments have been missed. We understand that the loss of a vehicle can have many negative impacts, including endangering a person's employment. There are options for recovering an involuntarily repossessed vehicle and restructuring the associated debt so that the repayment terms are more affordable.
If you intend to keep an auto that has already been repossessed, you must act before the car is sold at auction. Call our office today at 616.389.0629 for a free consultation on how to:
Repossession: Protect or Recover your Car Now!
Autos are not the only type of personal property that can be repossessed. Property such as jewelry, furniture and appliances may also be repossessed because they secure a debt or a loan that was taken out for the purchase of the collateral. Chapter 13 allows for the modification of this type of secured debt, which most often results in more affordable terms of repayment.
By filing a Chapter 13 you may be able to retain your car and make the auto loan more affordable. This can be accomplished in a variety of ways, such as:
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