Brooks v. GMAC. The Maine Bankruptcy Court, on April 10, 2006, held that a car lender is not required to release its lien on a vehicle in a Chapter 13 case, pursuant to payment of the secured portion of the debt on the car, until after the debtor receives his or her chapter 13 discharge for the successful completion of the plan. In the past, debtors have been receiving their lien releases on vehicles after the secured portion of the debt is paid in a Chapter 13. The effect of this decision is to make a vehicle loan "cramdown" in a 13 much less valuable, and removes an incentive that previously existed for debtors to choose Chapter 13 over Chapter 7.
The #1 reason for choosing Chapter 13 bankruptcy over chapter 7 is to save your home from foreclosure. »See the List of Nine Reasons.