Chapter 13 and Vehicles
Joliet Illinois Bankruptcy Lawyers & Attorneys
Jesse Barrientes: Is it the same for my vehicle?
David Siegel: No, it’s a little bit different for the vehicle. On a newer vehicle purchase you’re going to have to pay it back in full. On an older vehicle purchase that you’ve had for more than two and a half years, you can pay back the secured portion at 100 percent and whatever unsecured portion there is, your Joliet Chapter 13 bankruptcy attorney can reduce that down to as low as ten percent in certain cases.
Jesse Barrientes: What do you mean secured portion and unsecured portion of the vehicle?
David Siegel: Well, let’s say you have a vehicle that you owe $20 thousand on and it has a market value of $15 thousand.
Jesse Barrientes: So I’m upside down on that.
David Siegel: Yes. The secured portion would be the $15 thousand – what the vehicle is worth. The remaining $5 thousand would be the unsecured portion. Because if you returned that car back to the finance company, they would only be able to get $15 thousand for it at auction. They would have to eat the other $5 thousand.
Jesse Barrientes: So is that what you call a cram down? They’re crammed down.
David Siegel: That is a cram down to a certain extent, yes. You’re paying them whatever the secured market value is and any overage you’re throwing into this pot which potentially could be less than in full.
Jesse Barrientes: But that’s only with the car that you own. With a leased car it doesn’t work that way, does it?
David Siegel: Right. A leased car is just that. You don’t own it. You are renting it. Just like you’re renting an apartment. So you have to continue to make your rental or lease payment outside of the bankruptcy like you always have. It’s just a financed vehicle that gets put into your consolidated payment to the trustee along with all of your other debt.
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Chapter 7
What’s needed to file a Chapter 7 case?
Stay on creditors during a Chapter 7 case
Mistakes made in a Chapter 7 case
Listing creditors in a Chapter 7 case
Credit counseling classes in a Chapter 7 case
Notice to creditors in a Chapter 7 case
There is life after bankruptcy
Chapter 13
Saving your home with a Chapter 13
Stopping a sheriff sale using Chapter 13
Converting to a different chapter from Chapter 13
