What happens to my car loan in Chapter 13 Bankruptcy?

In Chapter 13 Bankruptcy in Washington, your car loan is treated differently than other debts. The court will review your specific financial situation and work with you to come up with a repayment plan that fits your budget. When you file for Chapter 13 Bankruptcy, your car loan will not be discharged. The court will determine how much you need to pay each month towards your car loan, and this amount could be reduced depending on your financial situation. If your car loan is up to date at the time of filing, you may be able to keep making payments to your car lender outside of the bankruptcy plan. However, if you’re behind on payments, then you must bring them current in your repayment plan. It’s also possible that you’ll be able to reduce the balance of your car loan if it was taken out for more than the actual value of the car. Your car lender must accept the payments set forth by the bankruptcy court, and all interest and fees must be frozen. Also, if you’re facing repossession, Chapter 13 Bankruptcy can help you. It will stop the repossession process and, in most cases, allow you to keep your car as long as you make your payments in the repayment plan. Finally, it’s important to remember that Chapter 13 Bankruptcy does not relieve you of all of your debt. When the repayment plan is complete, you will be responsible for any remaining balances on your car loan.

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What happens to my car loan in Chapter 13 Bankruptcy?

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