how does cram down work?

[LawRookie]

I wanted to explore the option of craming down. I'm not really sure what it is exactly but I wanted to see if I can use it.

I'm in CHp 13 now..have not confirmed yet.

got a secure loan on investment property for $185K bank's valuation is $20K leave 165K unsecured. Can I cram down the 185K to 20K what happens to the 165K...get wiped out or added to unsecured?

if added to unsecured then what good is the cram down.

[debtinohio]

The remaining is converted to unsecured. The benefit is in theory you would pay a smaller percentage back to unsecured.

You will need to have it professionally appraised and it still seems hard to find an attorney to cramdown real estate. I'm not sure if I will push a cramdown (worth 90K, owe $130K) on my rental or not, it seems like a good time to exit the landlord business for me and return the property.

I'm also assuming this would then increase your income since the mortgage payment would drop considerably.

[lrprn]

I wanted to explore the option of craming down. I'm not really sure what it is exactly but I wanted to see if I can use it.

'Cram down' is used for cars that you purchased more than 910 days before you filed. In that case, the bk law allows you to cram the car's loan value down to the car's true market value.

However, since you are talking about investment property values, currently an asset property's loan can't be crammed down to market value when filing. There was a bill being considered by Congress that would have allowed bk judges to lower ('cram down') a home mortgage's loan value to its current market value when bankruptcy was filed, but the Senate killed it earlier this year. Sorry to be the one to burst the bubble

[debtinohio]

You can cramdown investment/second/vacation homes just not a primary residence.