Its possible to reduce the debt on your vehicle by filing a bankruptcy case. This benefits vehicle owners who owe more than their car is worth. Both chapter 7 and chapter 13 allow for reducing the vehicle loan.
In chapter 7, you can reduce the debt if you qualify for a redemption loan. The new creditor pays the vehicle’s fair market value to your lender. The remaining debt is discharge by the bankruptcy court.
In chapter 13, you may propose a plan that pays the fair market value provided the loan is at least 2.5 years old. The payment for the vehicle is included in the monthly payment you make on all your debts.