Ifmy Chapter 13 is in default, will my car loan account be reopened?
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Ifmy Chapter 13 is in default, will my car loan account be reopened?
I have filed Chapter 13. I am in default by 2 months and have only been on the plan for 5 months. A debt that was included was my car loan. The debt is closed on my credit report. If my Chapter 13 is dimissed, can my account for the car loan be reopened? Will my car be at risk for repossesion?
Asked on June 14, 2012 under Bankruptcy Law, Illinois
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If your Chapter 13 reorganization is in default and eventually gets dismissed by the bankruptcy court your loan for your car then reverts back to the original agreed upon terms and will not be able to be reopened by the bankruptcy court. If you do not stay current on your car loan, the vehicle is at risk for repossession.
From a practical standpoint, assuming you are current on your car payments under your Chapter 13 bankruptcy and it is dismissed, the lender may still elect to keep the monthly payments you are making and not seek the original monthly terms under your loan pre-bankruptcy filing.
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