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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I recently filed Ch. 13 (pro se) in the Eastern District of

Customer Question

I recently filed Ch. 13 (pro se) in the Eastern District of Virginia (Norfolk, VA). I have read through the local rules and researched a bit on the web regarding this question, but have not come across a definition: What amount constitutes "adequate protection" for payments made on a vehicle title loan? Within my plan (recently modified), I made a motion to cram down the interest rate on the loan to 5% (trustee to make the payments pro rata). I have proposed adequate protection payments at the original contract rate of the loan - around 144% APR - (because at the time I thought it was required). However, on reflection - that seems like an extremely high interest rate for "adequate protection" when my loan qualifies to be crammed down upon confirmation. Would adequate protection payments at 5% be sufficient to keep the vehicle from being repossessed before plan confirmation? The value of the vehicle is approx. $3000 and the balance of the loan is $2216. Thank you.
Submitted: 7 months ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 months ago.
Short answer - whatever the creditor is ok with! Better answer - usually, if you pay it off in less than 36 months, that figure would likely be satisfactory, so 1/36, 1/24, 1/12 of the balance, per month, or if the plan is tight, you can even do 1/60. But the higher the amount, the less interest you'll pay.The interest would be the same as you are proposing, 5% per your example.Let me know if you have any questions!If satisfied, please Rate my answer. Thanks
Customer: replied 7 months ago.
Ok, so just to make sure I understand correctly: I can make my payments *before* plan confirmation at the 5% interest rate if the creditor agrees? (I want to make sure the vehicle doesn't get repo'd before the plan is confirmed!) And also, would the creditor have to motion to lift the automatic stay before they could repossess the vehicle?
Expert:  Terry L. replied 7 months ago.
yes. you have automatic stay protection, so they cannot repossess the car, and they would have to move to modify the stay before they can act (Assuming this is the first chapter 13 in the last 12 months).