Your Car in Chapter 13 Bankruptcy
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One advantage of Chapter 13 bankruptcy is that you keep your property, including your car, van, truck, motorcycle, or other vehicle. There are some other Chapter 13 features that come in handy when it comes to your vehicle:
- If you are behind on your car loan payments, you can make up the arrears through your Chapter 13 repayment plan.
- If you are upside down on your car loan, and meet certain time restrictions, you may be able to reduce your car loan to the value of your car -- this is called a cramdown.
And if you are facing imminent car repossession or your lender repossessed your car but has not yet sold it, filing for Chapter 13 bankruptcy will stop the repossession or sale, and give you the opportunity to get your car back.
Keep in mind, that unless you have lots of equity in your car, you will probably be able to keep it in Chapter 7 bankruptcy too. (See Your Car in Chapter 7 Bankruptcy.)
Overview Articles
Find out what happens to your car and car loan in Chapter 13 bankruptcy.
Whether you have to keep making payments on your car loan depends on what type of bankruptcy you file, whether you want to keep the car, and other factors.
If you are behind in car loan payments, Chapter 13 might help you keep your car. Here's how.
Find out if you can keep two cars in Chapter 13 bankruptcy.
Valuing your car correctly can make a big difference in bankruptcy.
Car Repossessions and Chapter 13
Learn how bankruptcy affects car repossessions.
While the exact circumstances vary by state, in most cases bankruptcy can assist you in getting your vehicle back.
If your lender repossessed but did not sell your car, you may still be able to get it back in Chapter 13 bankruptcy.
Reducing Your Car Loan: Cramdowns
In certain situations, you can reduce the principal amount owed on your car loan in Chapter 7 or Chapter 13 bankruptcy. Here's how.
A cramdown can reduce your car loan in Chapter 13 bankruptcy. Here's how it works.
If you have been financing your car for over 910 days (two and a half years) you may be able to reduce the principle owed to the fair market value in a chapter 13 bankruptcy case.
Car Leases in Chapter 13
Find out what happens to your car lease if you file for Chapter 13 bankruptcy.
State Motor Vehicle Exemptions
Click on this link to bring you to our Bankruptcy in Your State page. Then click on your state link to find state-specific bankruptcy information, including state bankruptcy exemptions.