One of the little known facts in a Chapter 13 bankruptcy, is that someone can repay a vehicle loan using the Till rate of interest rather than contract rate, as well as value the vehicle at it’s current market value. That can be important if the vehicle is “underwater” and more is owed than what it is actually worth.
But what exactly is a Till Rate? And why has it been going up over the past couple years? Do we expect it to drop back down? After all, it was incredibly low for so many years.
The Till Rate, or Trustee rate, is a presumptive interest rate used in chapter 13 cases paying off secured debts over the life of the Chapter 13 Plan. The rate takes its name from the Supreme Court case Till v. SCS Credit Corp., which affirmed the notion that interest in chapter 13 was the combination of a risk factor and the prime rate. The Till rate is calculated from the Wall Street Journal “Prime” rate, plus 1.5.
| EFFECTIVE DATE RANGE | TILL RATE |
| 03/23/2023 | 9.50% |
| 02/02/2023 | 9.25% |
| 12/15/22 | 9.00% |
| 11/3/2022 | 8.50% |
| 9/22/22 | 7.75% |
| 7/28/22 | 7.00% |
| 6/16/22 | 6.25% |
| 5/5/22 | 5.50% |
| 3/17/22 | 5.00% |
| 3/17/20 | 4.75% |
There are so many things that can be done in a bankruptcy, whether Chapter 7 or 13. For instance, did you know that we can even reduce or eliminate federal student loans now with the new DOJ guidance? We helped teach an all day class on that to our fellow attorneys last week.
Come talk with us if you’d like to know more about how a bankruptcy filing can help dig you out of a hole.