How to Reduce Car Loan Payment in Chapter 13

 “How Can I Reduce My Car Loan Payment in a Chapter 13?”

In some instances you may be able to reduce the amount you have to repay on a car loan in a Chapter 13 bankruptcy case.  As long as there is not a non-filing co-debtor on the vehicle loan, the interest rate on the car will be the rate set by the bankruptcy court, which is currently about 6%.   So for clients with high interest rates on their car loans, they will pay less than they would outside of bankruptcy.  If the vehicle loan was taken out more than two and a half years prior to the filing of the Chapter 13 bankruptcy case, only the amount of the loan up to the fair market value will need to be repaid.  If you owe quite a bit more than your car is worth and your car loan is more than two and a half years old you may experience a substantial savings.  

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