With the current pandemic and the adverse effect it has had on the economy, you may be struggling to keep up with your bills, especially when it comes to your car payment. If you are behind on your payments and have defaulted on the loan, you are at risk of having your vehicle repossessed. And while you may feel that you have run out of options, there is a solution that can help. By filing for Chapter 13 bankruptcy in GA, you can create a repayment plan that reduces your car loan and interest rate so that you can retain ownership of your vehicle.
The experts at CMC Law will provide you with invaluable insights and guidance to help you win your case.
Filing for Chapter 13 Bankruptcy in GA
Pursuing Chapter 13 bankruptcy in GA is the best way to keep your car if you have fallen behind on your payments because it consolidates your debt into a repayment plan that is based on your current expenses and income. If this repayment plan is approved by the judge in your case, your past due vehicle payments will be consolidated into a single monthly payment that you will make for the next three to five years to reimburse your creditor.
How Filing for Chapter 13 Bankruptcy Can Reduce Your Car Loan and Interest Rate
When you file for Chapter 13 bankruptcy in GA, you can modify the terms of your car loan and reduce your interest rate. This new amount will be dependent on several factors including your current income, credit history and car repayment history. In many cases, your interest rate has the potential to be reduced anywhere between 3.25%-6.25%.
Much of the specifics will be determined by the original date that you purchased your vehicle. If you bought your car more than 910 days (or 2.5 years) before filing for Chapter 13 bankruptcy in GA, you may be able to pay the current fair market value of the car with a reasonable interest rate instead of the amount that you still owe. In Georgia courts, this interest amount is the prime interest rate on the day that you filed bankruptcy with an additional 2% added.
If you purchased your vehicle within 2.5 years (or 910 days) before filing for Chapter 13 bankruptcy in GA, you will be required to pay the full amount back to your creditor. However, you still have the ability to reduce your interest rate, which has the potential to save you thousands of dollars while allowing you to keep your vehicle.
File for Chapter 13 Bankruptcy to Maintain Ownership of Your Car
When you file for Chapter 13 bankruptcy in GA, an automatic stay is placed on your creditor so that they cannot take your car from you unless they have been given a court order. This will help to reduce your stress and give you the time you need to produce a repayment plan that will lower your interest rate so that you can retain ownership of your vehicle.
Contact CMC Law today to schedule a free consultation and learn more about Chapter 13 bankruptcy.
The experts at CMC Law will work hard to protect what matters most to you.