Is interest rate reduced when car loan is paid in ch 13 plan?

[sheilaE]

We're paying 28% for the used car we purchased in March. I know-CRAZY!!! Our credit rating was already shot, but we needed to purchase a reliable auto before heading into a chapter 13. I want the interest rate lowered, but I don't think I want to put the payment into our plan and pay the trustee for making the payment for us.

[Pandora]

We're paying 28% for the used car we purchased in March. I know-CRAZY!!! Our credit rating was already shot, but we needed to purchase a reliable auto before heading into a chapter 13. I want the interest rate lowered, but I don't think I want to put the payment into our plan and pay the trustee for making the payment for us.

Sheila - OUCH! I think to get the interest rate lowered, you have to include it in your plan. To be able to reduce a 28% rate down to 6-7% is well worth it IMO, even if you cant cram it down.

[sheilaE]

Thanks Pandora! So, we should definitely put it in our plan? I guess if the interest rate were to be lowered then so would the payment...meaning freeing up some DMI? This is why we've yet to file-I've learned so much on here!

[Pandora]

If it were me and putting my car payment into the plan was the only way to lower the 28% interest rate, then without a doubt I'd do it. But again, thats me . I'm not sure if the payment will decrease or if you'd just pay it off earlier but during your plan. ? We didnt include our car payment in our plan because it wouldn't of changed anything for us putting it in the plan vs. keeping it out. In keeping it out we just dont pay the trustee any $ to make our payment.

I'd definitely ask your attorney if its required to have it in your plan in order to lower the rate. I'm not certain if it is or isnt.

[jetsfan2010]

My rate went from 21 to 6 percent, which was more than worth it. I unfortunately had to include the entire balance owed, though the car has about 5k neg equity already