Can I Reaffirm and Keep a Vehicle in Chapter 13?
Unlike a Chapter 7 bankruptcy, there is no formal reaffirmation agreement in a Chapter 13 bankruptcy. In Georgia, if you choose to keep your vehicle in a Chapter 13 bankruptcy, the terms of the loan may be changed under certain circumstances. In a Chapter 13, if you purchased your vehicle more than 910 days prior to filing bankruptcy, you can actually propose to pay the creditor for just the fair market value of the vehicle at a reasonable interest rate (normally prime interest rate on the date of filing plus 2 percent normally works in Georgia courts). Even if you purchased your vehicle less than 910 days before you filed Chapter 13, you can still propose to lower your interest rate to a reasonable rate in your Chapter 13 plan. Since car payments are normally included in your monthly Chapter 13 payment to the trustee, you would not actually make a separate car payment to the creditor.
On the other hand, in a Chapter 7, in order to keep a car, you have to sign a reaffirmation agreement with your car creditor under the same terms of your original loan agreement and continuing making the same monthly payment that you made prior to filing bankruptcy. Thus, Chapter 13 may be more advantageous for you if you purchased your vehicle more than 2.5 years ago at a high interest rate and owe more money on the vehicle than it is worth and if you your monthly car payment is higher than you can afford to pay.
If you have questions regarding keeping your car in bankruptcy or the differences between Chapter 7 and Chapter 13, please contact the Law Offices of Charles Clapp at (404) 585-0040 to schedule a free consultation.
Charles is absolutely a brilliant attorney! He is a critical thinker and determined problem solver. He is very accessible, even via text. If he is in court, his ability to multi-task, you can feel safe and secure in knowing he is handling any issues or concerns. I entrust him with my future, he is a uniquely talented attorney who always challenges himself to achieve the absolute best outcome for his clients.
I was very satisfied with Mr. Clapp services. He is a man of his word and did everything he told me he would. I would highly recommend him.
I came to Mr. Clapp by referral with a complicated case involving both personal and business debts that were out of control. Mr. Clapp evaluated the situation and gave me options that I was not even aware of. He knows his stuff, executed flawlessly, and I have been able to start over. I highly recommend Charles Clapp if you have debt or bankruptcy issues. Listen to his advice, he knows his stuff. I consulted with several other bankruptcy attorneys prior to retaining Mr. Clapp, and they did not have the same breadth of knowledge that Mr. Clapp brought to my case.
I selected Charles Clapp to handle my bankruptcy based on his already positive reviews and I am glad that I did! He was very accommodating to my schedule and made my negative life experience positive. I was actually very surprised how easy he made the process. Life happens and it’s great to be represented by someone that understand that!!! Stop your attorney search with Charles Clapp!!!