What happens to my car loan in Chapter 13 Bankruptcy?

If you have a car loan and file for Chapter 13 Bankruptcy in South Carolina, the court will determine how you will handle the car loan. Depending on your financial situation, you may be offered a payment plan that will allow you to keep your car. This payment plan will include the loan interests and any fees associated with the loan, and will be added to the repayment plan you already designed with the court. Once the court approves the plan, your payments will be made directly to the court who will then pay your loan. If you are unable to afford the payment plan, the court may allow you to surrender your vehicle. This means that you give up the car and will no longer need to make payments to the lender. You may also be able to reduce the amount you owe on the loan. This is called a “cramdown” and requires a court order. In both of these cases, you will be released from any personal liability for the loan and the lender will not be able to take action against you. The lender may also not be able to repossess the vehicle, as the court will take control of it as part of the process. No matter what, be sure to speak with a bankruptcy attorney to understand the full process and the best options for you.

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What happens to my car loan in Chapter 13 Bankruptcy?

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