Car loan

[msjenni1970]

I will be filing chapter 13 at the end of the month. I currently am financing a vehicle for about 11 thousand dollars. The car is truly only worth about 6000. Does the trustee take that into account and adjust it ( I know they did that in the old way of chapter 13) are am I going to be stuck paying the entire 11 grand??

[SinkingFast]

Depends on how long you've had the loan. There's new rules about "Cram Down".

If you recently purchased, you'll likely get hit for the entire amount if you decide to keep the car.

"Cram down" secured debts that are worth more than the property that secures them. You can use Chapter 13 to reduce a debt to the replacement value of the property securing it, then pay off that debt through your plan. For example, if you owe $10,000 on a car loan and the car is worth only $6,000, you can propose a plan that pays the creditor $6,000 and have the rest of the loan discharged. http://www.nolo.com/article.cfm/Obje...3/161/176/ART/

At another site, I read that this can actually make payments higher, and the debtor's ability to retain a vehicle more difficult than before.