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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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My car loan was included in a Chapter 13 bankruptcy and was

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My car loan was included in a Chapter 13 bankruptcy and was not paid in full prior to the case being dismissed. The interest rated was lowered in the bankruptcy. I have the amount of the claim submitted to the Court and the principal balance owed at the time of dismissal. Would this be the amount I would need to pay off? What about interest? I assume it would revert back to the original rate, but only on the unpaid balance?
The claim would revert back to the original loan contract. Any payments made during bankruptcy would be credited to the loan payment, however, if the interest rate was lowered, your new balance may not reflect the entire value of your payments, because the interest that would have been charged will reduce the amount of your principal payments made during bankruptcy.

This actually makes for a rather difficult little accounting problem, because you and the lender will have to take the payments made during bankruptcy, and reapply them to the loan balance on the dates of payment but according to the original loan terms, and then recalculate the remaining balance for each payment date, to obtain a final payoff amount.

BotXXXXX XXXXXne, whatever was imposed under the bankruptcy plan is null and void (i.e., as if it never occurred).

Hope this helps.

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