cram down on car question

[DUMBAGAIN]

I think my attry had said in order to 'cram down" our car we had to have had it at least 900 and some days, does anyone know. I'm going to call him tomorrow, but DH and I are trying to figure something out tonight.

[optimistic1]

Needs to be atleast 2.5 years from the purchase date to do a "cram down".
912.5 days or so. So he is about right.

[DUMBAGAIN]

Thanks and when they "cram" what does that actually do for us?

[optimistic1]

Well, if say you owe, $12000 on the car, and its worth only $6000, then when they do your plan, thje $6000 portion of it is a secured claim, which means it gets paid first, and the rest becomes a un-secured claim, and it gets in line with the rest of the un-secured claims like credit cards. At the end of the 60 month period, some of the unsecured might get paid, some might not.

What it does, is free up more money out of your budget or DMI to help pay for all the secured and unsecured claims.

If you are a 0% unsecured, like me, (presumption), then it basically makes you pay much less per month on the car. And allows you to free up money in your expenses or it increases your DMI which would pay more into the plan.

Everyones situation is much different though.

[DUMBAGAIN]

And if I'm paying secured creditors 100%, then "cram" would do me no good?

[optimistic1]

Well, do you know that for sure?

There must be another reason it should be beneficial.

Wait until Justbroke or HHM chime in with a response.

They are like the Jedi masters of Bankruptcy.

[justbroke]

I think my attry had said in order to 'cram down" our car we had to have had it at least 900 and some days, does anyone know. I'm going to call him tomorrow, but DH and I are trying to figure something out tonight.

It is 2.5 years or 910 days that you must have had the loan. If you refinanced the loan, then you can cram down the refinanced loan.

And if I'm paying secured creditors 100%, then "cram" would do me no good?

In a 100% plan, a cram down does no good.

The good part, though, is that maybe the way your secured payments are scheduled for the automobile, it could be paid off earlier (the secured part) and get your title sooner.

Other than that... cramming down a vehicle in a 100% plan does nothing in respect to how much you'll pay for the vehicle in the plan.

[optimistic1]

Hey Justbroke,

What If I refinanced, and it wasnt 2.5 years since then?

[DUMBAGAIN]

ok...MAN, what a pickle I've put myself in, I'm not seemingly getting any breaks here.

[justbroke]

Hey Justbroke,

What If I refinanced, and it wasnt 2.5 years since then?

A refinance destroys what they call the "purchase money" characteristic of your loan. Since you didn't use the refinancing to actually purchase the vehicle, the new bankruptcy code (sometimes known as the 910-vehicle rule) does not apply! Therefore, you can cramdown a car if it was refinanced.

I will caveat this with it depends on underlying State non-bankruptcy law and what a State deems a refinance does to the original loan. If you refinanced it with the same lender, it could easily be construed that you only renegotiated terms. However, if you refinanced with a different lender, who paid off the first lender, then you don't have that particular issue.

Simply put, a refinance means that you don't have to wait the 910 days in the majority of cases.

[justbroke]

ok...MAN, what a pickle I've put myself in, I'm not seemingly getting any breaks here.

Which is it... your vehicle was purchased less than 910 days ago, or that you're in a 100% plan so it's moot?

[DUMBAGAIN]

100% payback. The problem is we filed a BK in July 05. Our 4 years are not up until July. So we have a 100% payback. I have no idea if we wait if we will have to payback less or not. I'm going to call my lawyer this week and ask. If yes, we may try and hold off, but if not, then we might as well get started.

[HHM]

If you are already in a confirmed chapter 13, this issue is a non-starter. You cannot go back and amend your plan to cram down your vehicle.

But to the larger point, you are only in a 100% plan because your plan payments will provide for 100% to your "existing" unsecured creditors. If via a vehicle cram down or a Mortgage Lien strip your unsecured claim goes significantly higher, you might not be in a 100% plan anymore.

Even if you are in a 100% plan, I would still put the cram down in the plan.

[DUMBAGAIN]

I've not even filed yet, just getting started.

[santadawg]

This doesn't make any sense---------------at least to me
the 2nd time around any way