Tip of the Day 11/26/2012 “Underwater on your car loan?”

Tip of the Day 11/26/2012 “Underwater on your car loan?”

If you are “underwater” on your car loan, meaning you owe more than the car is worth, the bankruptcy code has a special provision that might help. If you purchased or borrowed against your car more than 910 days ago (about 2-1/2 years) you can redeem the car for what it is worth and discharge the remaining balance. In Chapter 13, you can spread the repayment of the value of the car over the life of the plan- up to five years. The interest rate will be about 4.5% on the new “loan”. Don’t forget that you also have to pay the trustee’s fee on all payments made through the plan so the cost of the new “loan” is somewhat higher than the 4.5% interest paid to the creditor. For more information about underwater car loans, call me at (812) 727-0597 or send us an email

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The Law Office of Justin A. Steele, LLP

P.O. Box 1696
Bloomington, IN  47402
P: (812) 727-0597
F: (812) 307-4862
E: Email me

Other hours available by appointment

 

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Click here for information regarding fees and required disclosures.

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