Owing more than your vehicle is worth can make a precarious financial situation even worse. High monthly payments can make keeping up with your other bills nearly impossible, while above-prime interest payments can result in borrowers paying as much as double what the vehicle’s worth over the life of the loan. Fortunately, filing for bankruptcy protection may allow you to keep your vehicle and renegotiate more favorable repayment terms.

How Chapter 13 Bankruptcy Can Save Your Vehicle

A Chapter 13 bankruptcy allows you to restructure your secured debts, including loans for vehicles, boats, and household appliances. In many cases, the courts may allow you to cram down the total balance owed on your car loan, as well as the interest rate or expected repayment schedule, providing financial relief while allowing you to fulfill your obligations.

Under a Chapter 13 bankruptcy, you may be able to pay only the vehicle’s actual worth, converting the remainder of the loan into unsecured debt which is eligible for discharge like your credit cards and medical debt. Because the new payment amount will be based on the fair market value of the vehicle, a cramdown can result in substantial savings.

Interest rates and the terms of the payment can also be crammed down when filing for bankruptcy. By reducing the balance and the interest rate and extending payments for the duration of your Chapter 13 plan, you can significantly reduce your monthly expenses and keep your vehicle from repossession.

The bankruptcy attorneys at Greene Law, PC focus closely on helping Farmington, CT, borrowers find the debt relief they desperately need. If you’re struggling with debts you can’t repay, their dedicated team will identify all of your options and help you get a second chance at life. Visit their website now to learn more about their services, or call (860) 676-1336 to discuss the advantages of filing for bankruptcy.