Chapter 7
Chapter 13
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“Mr. Long eliminated my stress regarding filing bankruptcy, answered all of my questions, and filed my documents with the court within just 2 days! He made the procedures to filing very easy for me without any added stress.”
-Mrs. H
“I called this office just to ask questions. I had already chosen another law office to handle my situation, but I wanted to confirm what they were telling me was correct. I enjoyed the detail of the conversation that I had with Ms. Johnson so much that I switched to this firm to handle my case. They represented me well and helped me make decisions for what I needed to do after my case was resolved.”
-Ms. C
Chapter 13 Bankruptcy Cramdowns
It’s possible to reduce your debts through Chapter 13 bankruptcy.
Chapter 13 bankruptcy is meant to alleviate, reduce and eliminate as much debt as possible for a debtor who cannot manage current financial obligations without help from the bankruptcy court. With the help of the proper bankruptcy attorney, you will be able to examine all of your options to decide the best course of action for your situation to become debt free.
A “cramdown” is used to reduce the balance on a loan to the market value of the property securing the loan. A cramdown can be applied to some secured debts, such as cars purchased more than 910 days before filing, title loans, and loans whose proceeds were not used to purchase the collateral. This can make a huge difference. Suppose you have an auto worth $12,000 dollars but owe $21,000 dollars on the loan. A chapter 13 can allow you to keep the car while paying the lender $12,000 instead of $21,000 and you own the vehicle free of payments when the case concludes. A debt is considered “secured” if the lender has a security interest in the debtor’s property and can repossess the property if the debtor fails to make loan payments in the correct amount and on time.
A cramdown is achieved through the Chapter 13 bankruptcy repayment plan. The monthly installation that a debtor agrees to pay in order to maintain the property throughout the bankruptcy period is based on the value of the collateral at the time of filing. In keeping to the repayment plan, a debtor may be released of remaining debts and outstanding interests upon the end of the bankruptcy period.
In both cramdowns on autos with loans older than 910 days, and newer car loans, a debtor can often reduce the interest rates and stretch out payments over longer periods of time in order to lower the debtor’s monthly obligations. In some case, the total payment required to satisfy ALL your debts is less in a Chapter 13 than just your car payment was before the bankruptcy. There are many benefits to cramdowns and term adjustment allowances in Chapter 13 bankruptcy. This makes filing for Chapter 13 a good option for many individuals who are in financial trouble and wish to get themselves out of debt as quickly and easily as possible, and to stop harassment from creditors for the time being.
Contact Long, Burnett, and Johnson, PLLC
If you are experiencing extreme debt that you are struggling to manage, you need the help of an experienced bankruptcy lawyer. The attorneys at Long, Burnett, and Johnson, PLLC are knowledgeable in all things pertaining to bankruptcy, finance, and the law, and will work with you to strategize your best course of action.