cram down question

[deadbroke99]

I bought a 2004 Toyota Camry new in 2004. In December 2006 I refinanced it which lowered my payments from $450.00 a month to $280.00 a month. Can I use the original purchase as my cram down date for the 910 days?

[justbroke]

I bought a 2004 Toyota Camry new in 2004. In December 2006 I refinanced it which lowered my payments from $450.00 a month to $280.00 a month. Can I use the original purchase as my cram down date for the 910 days?

Yes! Even if you refinanced it through the same company.

For all intents and purposes, re-financing destroys what is called the "purchase money" aspect of your purchase. In order for your loan to be subject to that portion of the Bankruptcy Code 1325(a)(5) which prevents cramdown, it would have;

• been purchased within 910 days of filing the petition; AND
• been a purchase money loan (purchase money security interest); AND
• been purchased for personal use

Since your loan is a refinance... you'll have no issue.

Background:
See Matthews v. Transamerica Fin. Servs. (In re Matthews), 724 F.2d 798 (9th Cir. 1984) (concluding that refinancing destroys the purchase-money character of the obligation it replaces).

Relevant Law... hanging paragraph after 11 USC 1325(a)(9)...

For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day preceding the date of the filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor, or if collateral for that debt consists of any other thing of value, if the debt was incurred during the 1-year period preceding that filing

[deadbroke99]

ok thanks, It wasn't with the same company. It used to be financed with Capital One auto and is now financed with HSBC auto. Thanks

[justbroke]

ok thanks, It wasn't with the same company. It used to be financed with Capital One auto and is now financed with HSBC auto. Thanks

It wouldn't matter anyhow. There was a case in which it was re-financed with the same company, before the 910 days, and the lender said it was still the same loan... LOL.

[deadbroke99]

Thanks, it makes me feel better. I still owe around 10,000 and have 121,000 miles on it and KBB says it's worth 6,200...ughh

[BigJohn]

Does the 910 day rule apply to vehicles used for business? I understand it doesn't, so I assume that loan can be crammed down also, is this right?

[justbroke]

Does the 910 day rule apply to vehicles used for business? I understand it doesn't, so I assume that loan can be crammed down also, is this right?

No it doesn't. Read what I posted earlier...

• been purchased within 910 days of filing the petition; AND
• been a purchase money loan (purchase money security interest); AND
• been purchased for personal use

You will note that those conditions must all be met (hence the use or the connecting word "and"). Since business use is not personal use, it can be bifurcated (crammed down).