Car Payments,

[klux]

I guess I should've thought of this earlier, or maybe I confused myself. But has anyone had experience with a chapter 13, where the vehicle payments were behind. Do they have to be current at the time of filing, like with a 7, or can the arrears just be included to be paid in the plan (considering you are paying the loan over the life of the plan with interest anywhere)? At time of filing I will owe for August and September. Just wondering if the credit union might do an objection because of this.

People keep talking about repossession of vehicles, can someone explain why this happens, I thought when you filed bankruptcy the automatic stay went into force and any reposession/foreclosure proceedings needed to stop.

please advise.

[jennordhavn]

My understanding is that the arrears get included in the plan and get spread over the 60 months. So for example if you owed $1000 in back payments, it would be $16.66/mo. to the lender for the past due payments (not sure if they get paid a percentage like other unsecureds or if it's priority though). As for the repossession, I believe that the lender has to petition the court to get the stay lifted to repossess DURING the plan. But I think some peope are concerned because they haven't included the car in the BK and just continued to make payments and then AFTER the BK the car gets repossesed because technically it was part of the BK. Does that make sense? I think if it's included in a Ch. 13 and the payment is made through the plan, you won't have to worry about it getting repo'd.

[JollyGG]

You do not have to be current on car or house payments to file a chapter 13. The back amounts would be included in your plan. They would be considered secured debts and would be paid before any of your unsecured debt in the plan.

It seems to be up to your trustee and your lawyer if you normal car payment has to be in the plan or if it can be paid outside the plan.

The issues with reposessesion seem to be one of a couple of things.
1. They were behind when they filed and the company didn't get the filing notice before the reposession actually occured. In that case the vehicle needs to be given back.
2. The owners indicate that they want to surender the vehicle. The loan company has the automatic stay lifted and comes and gets the car.
3. The lender illegally reposesses the car dispite the automatic stay. In this case a lawyer needs to get involved and the lender will face sanctions.