If you live in New York City and you are behind on your car payments Chapter 13 can help. Each year there are an overwhelming number of auto repossessions in NYC. It can be embarrassing, humiliating and leave a person stranded to have his car repossessed. There is good news though; even if a car has been recently repossessed Chapter 13 Bankruptcy can help get the car back. If you live in NYC and are behind on your car payments this article is a mandatory reading for you.

So here is an overview of how it works. Someone falls behind on car payments and just when they are about ready to resume payments the car company calls and says they want the car back or all past due payments immediately. Now that can be very difficult to do on a moments notice. Similarly, people need cars to go to work, the doctor and just about every time they travel.

People in this situation can file a chapter 13 Bankruptcy and stop the risk of loosing the vehicle. Once a Chapter 13 is filed a repayment plan or model Chapter 13 plan is filed. This plan gives the Debtor up to 60 months to get caught up on payments. The collection efforts also must stop immediately because of the Automatic Stay in Bankruptcy. If the rates of the car are considered to be usury the debtor could even wind up getting a free car. Similarly, if the car is over 910 days old we can do what is called a cram down. In a cram down we lower the interest payment of the Debt to what is called the “Till rate” (prime plus 2%) and pay off the fair market value of the car over 60 months. This often means the Debtor will get the car, get out of all other debt and pay a small monthly fee for 60 months at the end of these payments he will own the car free and clear. This also wipes out almost all other debts. Usually the monthly payment is lower than the original car payment. No car payments are due once a Chapter 13 Cram down motion has been made.

Cars are very important to the wellbeing and lifestyles of many people in NYC. Some people need them for work or to get to the Doctor. If you find yourself falling behind on your car payments act quickly and contact my office for a free consultation. You may be paying much more than you should be. My office only focuses on Bankruptcy. We can be reached at 212-244-2882.