The answer is usually “YES!”, …but only if you qualify for Chapter 13* (a bankruptcy refinancing option).

In a Chapter 13 bankruptcy, (a payment plan for consumers) they may lower their interest rates to the prevailing federal prime rate plus 2%, which at this time is around 5.25%, AND stretch their payments out, refinancing up to 60 additional months after the bankruptcy is filed.

AN EVEN LOWER PAYMENT is available if the client purchased or financed the vehicle more than 2.5 years before the date Chapter 13 is filed. This option is called the “CRAM DOWN”, which means that the client may also refinance their vehicle (up to 60 additional months) using the retail (Bluebook) market value on the day they file as the new balance to be paid in their bankruptcy, PLUS use the lower interest rate used above.

*Clients must qualify for Chapter 13 relief, and their maximum relief depends on their income and expenses as determined by federal bankruptcy law.