Chapter 13 Bankruptcy – How It Can Reduce Your Car and House Payments?

In these tough economic times, we all need help where we can get it. People everywhere are losing their homes, their cars, sometimes everything and aren’t aware of the laws and how to use them to their advantage. Are you behind on your car or mortgage payment and have been threatened with foreclosure? Does the dealership want their car back because of missed payments? Believe it or not, you do have options.

Chapter 13 bankruptcy may be the answer. And although none of us ever want to file for bankruptcy, it can be an effective way to get back on your feet. You can use it to stop foreclosure. And once this is done, you can make up on those missed mortgage payments.

With your car, it works well too. Chapter 13 bankruptcy allows you to refinance your auto loan. Most people don’t realize that you can pay off what your car is worth, not what you owe on it. Interest rates can also be re-negotiated. Lenders would much rather receive some payment than nothing at all. The last thing they want is more bad debt on their balance sheet.

How does it work? Your creditors are essentially cut off, once the bankruptcy case is filed. It’s called an “automatic stay” and it immediately stops your creditors from trying to collect what you owe them. Creditors cannot repossess your car, foreclose on your house, garnish your wages, or cut off your utility service or welfare benefits. Most importantly if your car was purchased more than 910 days ago you only have to pay 90% of the NADA retail value of the car rather than the actual amount owed on it.  This really helps out a lot of folks who may have traded a car which was upside down and the dealer transferred the negative equity from the trade in to the newly purchased vehicle. So if your car is worth 5000.00 but you owe 10,000.00 on it you will generally speaking only have to pay back 5000.00 on it.

This can also work with houses if they have a 2nd mortgage on them.  If you owe the 1st mortgage 100,000.00 and the house is only worth that amount or less based on an appraisal than any 2nd mortgage and that property can be removed by the bankruptcy court so that you do not have to pay the 2nd mortgage any longer.  This is an important tool to use in today’s environment because the housing market is so depressed and houses have lost significant value.  Lots of people are filing chapter 13 bankruptcy in Charlotte NC and all across the country to take advantage of this and it would serve you well to talk to a bankruptcy attorney in your area.

Schwilm Law Firm is dedicated to providing our clients relief from the pressures of debt. We have extensive experience in advising clients as to the best course of action for your financial situation. We would like to meet with you to figure out a plan of action so you can get back to living a debt free life. For more information on, Charlotte bankruptcy laws, Charlotte bankruptcy, Charlotte Chapter 7 bankruptcy and Charlotte Chapter 13 bankruptcy call attorney Lee Schwilm at 704-567-5252.


People filing for bankruptcy often have this question – How can bankruptcy reduce their car and house payments?  The bankruptcy lawyer in Charlotte NC has discussed about how filing Chapter 13 bankruptcy can be a solution. Charlotte chapter 13 bankruptcy lawyers ….

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