What happens to my car loan in Chapter 13 Bankruptcy?

In California, filing for Chapter 13 bankruptcy can affect a car loan in many ways. Generally, a Chapter 13 bankruptcy filer’s car loan is either reorganized, discharged, or reaffirmed. When a car loan is reorganized, the loan terms are renegotiated. This process is usually beneficial for the debtor, as it usually involves either lowering the payments or extending the term of the loan to lower the payments. The interest rate on the loan may also be lowered. When a car loan is discharged in Chapter 13 bankruptcy, the debtor is exempt from having to repay any of the debt on the loan. However, if the loan was taken out within 910 days (about 2.5 years) of the filing of the case, the debtor may still be responsible for some of the debt. Lastly, the debtor may decide to reaffirm the loan in bankruptcy. This means that the debtor has agreed to remain responsible for repaying the loan and has agreed to the loan’s terms. This decision should not be taken lightly, as the debtor could still be responsible for repaying the loan even after the bankruptcy case is discharged. In summary, a Chapter 13 bankruptcy in California can affect a car loan in many ways. Depending on the situation, the loan may be reorganized, discharged, or reaffirmed. It is important for debtors to understand the implications of their decisions and make sure that they are comfortable with the outcome.

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What happens to my car loan in Chapter 13 Bankruptcy?

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