Here’s an example of when it’s better to reaffirm or cramdown a vehicle loan, to use a Chapter 7 case or a Chapter 13 one. We’re in a series of blog posts about choosing between Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts.” Along these lines two blog posts ago we outlined when to reaffirm a secured … Read More
Chapter 13 cramdown doesn’t just work for vehicle loans. You can also cram down debt for the purchase of “any other thing of value.”
If your vehicle is worth less than you owe on it, with good timing cramdown could reduce your monthly payment AND the total amount you pay.
How Chapter 13 helps you keep personal property collateral on a debt (such as furniture bought on credit) for less money through cramdown.
A business leases may not be a true lease but rather recharacterized as a secured purchase, giving you significant power over the creditor.
To determine whether a “lease” is actually a disguised secured purchase the bankruptcy court looks at the deal’s economic substance.
A “lease” of furniture or other consumer goods may actually be a disguised purchase. If so, through “cramdown” you can pay much less on it.
“Cramdown” of your vehicle loan can solve the problems of a reaffirmation agreement by lowering payments and protecting you much better.
If your vehicle is worth less than you owe, Chapter 13 “cramdown” can reduce your monthly vehicle payment and the total you pay on the loan.
Chapter 13 helps if you owe divorce debts, have personal property collateral, are behind on property taxes, or owe old and new income taxes.
It’s way past Thanksgiving but Chapter 13 has many features that make you take notice and appreciate what they can accomplish.
After covering Chapter 7 last time, now how does Chapter 13 help you keep (or surrender) collateral on a debt?
The second scenario, the Chapter 13 solution for keeping a vehicle if you’re behind on payments.
Some of the assets you may want to protect in a bankruptcy case are those that are security for debts.
Sometimes it’s obvious which of the two consumer bankruptcy solutions is right for you. But not always. You might be surprised.