Current statistics on bankruptcy in Georgia show that more than 13,000 people filed for a Chapter 13 bankruptcy in 2020. If you are considering filing for a Chapter 13 Bankruptcy, you are not alone. Many factors could lead to the inability to pay off your loans including:
- Loss of employment
- Illness or injury
- Excess use of credit
- Divorce or separation
- Unforeseen expenses
In the present economy with job losses, illness, and inflation, numerous people are finding themselves unable to pay all of their bills at the end of the month. Creditors and debt collectors may be calling to arrange for payments. If you find yourself “underwater” at the end of each month, you should consider talking to a Chapter 13 bankruptcy attorney who has a comprehensive understanding of bankruptcy law who can help you reduce your monthly payments and achieve financial stability.
How Does A Chapter 13 Bankruptcy Work?
A Chapter 13 bankruptcy gives people a chance to reorganize their secured debt and allows them to lower their monthly debt payments for three to five years. It may even be possible to restructure your debt and lower the amount due each month on your car loan.
If you have a regular monthly income that is sufficient to pay your monthly living expenses, the Chapter 13 process gives you an opportunity to reorganize your debts. Some types of debts must be paid in full, while others may be discharged. As long as you meet the legal requirements of a Chapter 13 Bankruptcy repayment plan, a creditor must abide by the terms of the plan. Finding an affordable Chapter 13 lawyer is a step on the road to getting back on solid financial ground.
How Can I Modify My Car Loan?
There are two possible options for lowering your car loan:
- Decreasing the balance of the loan.
- Reducing the interest rate.
Your car has likely depreciated since it was purchased, and the balance of your loan is now greater than the value of the car. If that is the case and you file for a Chapter 13 Bankruptcy 13, you may be able to lower the loan principal resulting in a lower monthly payment. However, there is an important restriction on this option. It is mandatory that you have owned the car for at least 910 days which is approximately two and a half years. A bankruptcy attorney can verify whether your car meets the criteria for a decrease in its value and help you arrange that.
You may be able to obtain a lower interest rate on the remaining balance of the loan making your monthly payments smaller. When the value of the car is reduced, the law allows you to obtain a lower interest rate on the loan. Even if you are unable to have the value of the care reduced, it may be possible to obtain a lower interest rate, thus reducing the monthly payment. Regardless of when the loan was made, a Chapter 13 bankruptcy provides the option of modifying the terms of the loan to a lower interest rate.
There may also be the possibility of extending the term of the loan to coincide with the length of the bankruptcy case. The monthly payment is spread over the additional time period which reduces the monthly amount.
How To Find The Best Bankruptcy Lawyer For Your Situation
Choosing the best consumer bankruptcy attorney in Georgia is not easy. You should look for a lawyer with substantial experience in bankruptcy law as opposed to someone who occasionally takes a bankruptcy case. Your local bar association may have a referral service to help you choose an experienced bankruptcy attorney. When choosing a lawyer to represent you, make sure to pick one who specializes in bankruptcy or does a considerable amount of work in this area of the law. The lawyer should be easy to talk to who answers your questions and verifies that you understand your options. It may take interviews with multiple attorneys before you find one who is a good fit who understands your goals and can help you lower your monthly car loan payment.