How does Chapter 13 bankruptcy affect the car loan on my Mazda?

I'm entering into Chapter 13 bankruptcy, but I still need my car to get to work. What will happen to my vehicle?

Answer
Since you want to keep your car in bankruptcy, you may be able to do so in Chapter 13.
The most direct way to keep your Mazda is to get up to date on your payments. As long as your payments are on time, the lender can’t repossess your car. You may also be able to reduce your car loan amount, also known as a cramdown. In a cramdown, some of the amount owed on the vehicle becomes unsecured debt and becomes part of your payment plan for other unsecured debt.
If you can’t afford the payments, however, surrendering the car or having your court-appointed trustee sell the car is often the better option. Do the math to see if the Mazda fits your budget.
If you do keep your car, you can save some money by shopping around for car insurance. With Jerry, you can get quotes from dozens of car insurance companies to get the best and most affordable rate.
Eric Schad
Answered on Oct 21, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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