Loan Cramdowns in Chapter 13 Bankruptcy
Posted By Price Law Group
debt can be extremely overwhelming, and in some cases it may appear that there
is no way to get out from the pit. For this reason, bankruptcy has been
established by the government as a way to help out the people come back
from debt and start a fresh.
Chapter 13 bankruptcy specifically is considered to be a debt reorganization rather
than elimination like
Chapter 7. This process means that our debt will likely be placed into one large
payment that you will have to make regularly for a period of 3 to 5 years
as determined by the court. This process protects you from creditors threatening
to receive repayment for what you owe them, among many other benefits.
That is not to say that bankruptcy is easy, however, it does allow individuals
the opportunity to get back on their feet after getting deep into debt.
In some cases you may have an investment property in which your principal
balance of debt (the mortgage you owe) is actually higher than the value
of the home itself. In this case, chapter 13 bankruptcies allows the opportunity
of what is called a "cramdown" in order to help you reduce that
principal payment. Unfortunately, only specific forms of secured debt
can be used for a cramdown. What makes your debt secured is that there
is a security interest by your lender in the property allowing them the
power to repossess in the event that you are unable to make your payments.
This can include your car payments, investment properties as well as various
forms of personal properties as well.
The process of a cram down can be complicating and for this reason, hiring
bankruptcy attorney in your area is absolutely essential. Contact the
Price Law Group today for more information on the best methods for fighting your debt,
we want to help you!
For more information call us at 866-210-1722 or fill out the form below.