Chapter 13 Dismissal and Car Loans

[paula61]

We may end up having our Chapter 13 dismissed. We still have both cars that we owe the unsecured portion of the loan on. We have paid all of our secured debts. If the court dismisses, does your lienholder usually give you a chance to reaffirm and pay off the amount owed on the cars or will they automatically repossess?

Thanks

[lrprn]

We may end up having our Chapter 13 dismissed.

Paula, why do you think your case may be dismissed? Have you missed a trustee payment?

If the court dismisses, does your lienholder usually give you a chance to reaffirm and pay off the amount owed on the cars or will they automatically repossess?

Depends on the state you live in. Some states won't allow a lender to repossess if the car payments are up to date. Other states don't have that protection and with the automatic stay gone, the lender is free to do what they wish.

I encourage you to talk to your lawyer NOW if you haven't already. Depending on why you think you are going to be dismissed, it's still possible to avoid dismissal if your lawyer talks with your trustee and arranges for you to miss a payment or files an amended plan if your income or circumstances have changed. Don't wait. Go find out what's possible right now.