Paying the Car Loan Directly vs. Through the Plan: Till Debt Us do Part?

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By Herbert L. Beskin, Chapter 13 Trustee for the Western District of Virginia (Charlottesville)

In a recent case out of the Sixth Circuit, the Appeals Court heard an appeal by the Chapter 13 Trustee concerning direct payments by the debtor on a car loan and the applicable interest rate. The case is In re Chambers, 6th Circuit, # 20-1376, Appeal from the E.D. of Michigan, 2021 WL 100566, decided 1/12/21, opinion by Judge Chad Readler.

The debtor owed $13,000 to Dort Federal Credit Union (“DFCU”) on a car loan. The confirmed plan . . .

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