A process available to individuals who have filed for a specific type of bankruptcy, namely, one structured to allow debt repayment over time. It involves altering the original terms of an agreement used to finance a vehicle. For example, the interest rate may be lowered, the loan term extended, or the principal balance reduced, all with the goal of making the payments more manageable within the constraints of the repayment plan.
This legal avenue can provide significant relief to debtors struggling to keep up with payments on vehicles, potentially preventing repossession. Successful utilization allows individuals to retain essential transportation while adhering to the court-approved debt restructuring plan. Historically, this provision reflects the understanding that reliable transportation is often critical for maintaining employment and fulfilling other obligations necessary for successful debt repayment.
