Cramdown and Surrending A Vehicle

[lawforever]

I have to pay 100% of my Chapter 13 Plan. I bought a vehicle more than 910 days ago (3 years ago). Can I cramdown the value of the vehicle even though I am surrendering it?

Thanks.

[justbroke]

No. You can't cramdown a surrendered vehicle, as that's superfluous. You would surrender and the creditor would file an unsecured claim.

I see what you're trying to do, but here's why it doesn't work. Say you owe $20K on the vehicle but it's worth $10K. Also say that the vehicle was purchased more than 2.5 years (910 days) ago and is subject to and you are going to cram down the value. The creditor would get a $10K secured claim, on which you'd pay over the term of your Chapter 13. The creditor would also get a $10K unsecured claim. Since you're in a 100% plan, you'd still end up paying the $20K for the car.

Now, if you surrendered the car, the creditor would sell the car for $10K and submit an unsecured claim for $10K. You'd pay that unsecured $10K over the life of your 100% plan.

So, which is better? (It's a trick question.)

[jimbo367]

If you do that you're screwed, cram it and keep it

[momofthree]

Ditto the others. If you're in a 100% payback plan, then cram it & keep the car! Worst case scenario, you end up paying less than 100% to unsecured debt. Not exactly a bad idea. ;)

[oops123]

I agree with the other voters, KEEP THE CAR. We surrendered two, but our payback on unsecure debt is small.