Chapter 13 Bankruptcy and Your Vehicles

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.)

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