Revaluing Cars and Other Secured Debt In A Chapter 13 Case

This is a similar strategy as Strategy Number #3, but it applies to car, boats, RV and other secured personal property (where they have the right repossess the property).

There are two important requirements.

First, this must be done in the context of a Chapter 13 bankruptcy.

Secondly, you must have purchased the property 2 ½ years from the date you filed bankruptcy.

The concept is simple: if you bought a car 2 ½ years ago, you owe $25,000.00, but its market value (look it up on Bluebook.com) is $10,000.00 it is possible to “revalue” this property at the $10,000.00 level, and through your Chapter 13 plan, repay the $10,000.00 (at either your contract interest rate (what you were paying) or 10% interest (whichever is cheaper) over 60 months or the 5 years of the plan.

So, in this hypothetical you would pay (not including interest) approximately $166.00 per month versus the amount your were paying on the $25,000.00 loan.

If your car, boat or other secured asset has depreciated in value since purchase (over 2 ½ years ago) in relation to the amount currently owed, you can keep the property at a much lower monthly payment. This is a great benefit to getting your monthly budget back on track. Again, talk to your attorney about this possibility if you considering Chapter 13.

Disclaimer

Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal  Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our offices at: (559) 228-1500 to schedule a consultation.