Bankruptcy can cram down the loan balance on a vehicle in ch. 13
Chapter 13 bankruptcy is an interesting beast. It can allow for a person to cram down the loan balance on a car through bankruptcy. This process is known as a bankruptcy cram down. Doing this can make keeping a vehicle make sense through making the payment more manageable. Brilliant bankruptcy options are not always easy to come by, and frankly, some attorneys may pitch a bankruptcy for a chapter 13 scenario with a vehicle that doesn’t sense.
There are situations where clients come to an attorney with a vehicle which they should not even own. The payments are too high, the vehicle is upside down, and there are many reasons to get out of the vehicle, but not many reasons to stay in the vehicle. Granted, there are difficult situations often encountered with vehicles. The client tends to think that they simply cannot be without a car. They need to get to work. Yes, this is true, but if you were to consider being willing to live more frugally with a more affordable car, then you could get yourself into a much better, more secure financial situation.
For this reason, you see that a dallas bankruptcy attorney who recommends a chapter 13 for the purpose solely of stopping a vehicle repossession may not be giving you the entire facts. That doesn’t mean that a chapter 13 bankruptcy to stop a repossession cannot be successful, but it means that any person would be wise to carefully consider the facts about their vehicle and whether it is upside down and whether they are best served keeping the vehicle or whether they should simply give the vehicle up and seek a more affordable vehicle. If people would simply consider being willing to get into vehicles that are more in line with their budgets and not try to buy as much of a payment as they think they can afford, they would come out ahead.