Filing Ch13 benefits to paying car in or out of payment plan?

[nomoneyinsc]

I have retained a lawyer and have turned in a lease and bought a used car. My first car payment is due in about 2 weeks.

Is there a benefit to turning the car over to the trustee or paying it myself?
I think I'm going to be a 100% payback so would prefer to pay the car myself and pay it off earlier if possible, just unsure of benefits of one way or the other.

Thanks

[justbroke]

No real benefit of paying it in the plan, unless you were behind in payments to start with (which would require it be paid in plan).

Paying it outside the plan... you save up to the 10% fee the Trustee charges to pay your creditors for you.

[lrprn]

Whether you or your trustee pay your car loan is based on two things - the customs and practices of your local bk court, and whether having your trustee pay your car loan or you is best in your specific situation.

Some courts require filers to have their trustee pay mortgages and/or car payments - some don't, Which path does your local court follow? (Your lawyer can tell you what to expect.)

As to which is best for your personal situation, as so many things are in Ch 13, it depends . In our situation, we were current on our car payments but our lawyer recommended having our trustee pay our car payments because then we could stretch the payments out over five years and lower our monthly Ch 13 payments. In your situation, that may not be the best thing to do. This is another question to ask your lawyer.

Let us know what you find out, ok?

[NowImDownInIt]

It was better for me in the long run. It was required because I was behind in payments. But it also took my HIGH interest rate (I was 19 when I bought it) and made it a lot more bearable. My interest rate was 18% now it's 7% and I will be paid off a year earlier.