Cars

[danaf]

What does 'cramming down' mean and what is the 910 day rule when it comes to cars?

[lrprn]

What does 'cramming down' mean and what is the 910 day rule when it comes to cars?

Cramdown means that when you file Ch 13, rather than listing what you actually owe on the car, instead you can list the actual resale value of the car. The lender loses any difference between what you actually owe on the car and its resale value.

Cramdowns used to be done routinely for all cars in Ch 13 up until Oct 2005 when the bk law was revised. Now the new bk law only allows cramdowns for cars that were purchased more than 910 days (about 2.5-3 years) before you file. Newer cars that were purchased less than 910 days before filing must list and repay their full loan amount, even if the loan owed on the car is far higher than the car's actual value.

HTH!

[CityGirl]

but if they work that into the bankruptcy, does that mean we still pay original payment but for another 5 years?
I only owe 4 years on it but 646.00 mo and I just bought it last year.

[danaf]

So nothing to do with a 7. thanks

[lrprn]

but if they work that into the bankruptcy, does that mean we still pay original payment but for another 5 years? I only owe 4 years on it but 646.00 mo and I just bought it last year.

CG, I'm guessing that you bought your car less than 910 days ago if you still have four years to pay on it.

A lot depends on which bankruptcy chapter you file. If you file Ch 7, then if your trustee goes for a high original payment, then you'll keep paying that payment yourself to your lender for the next four years. If you file Ch 13, then the four years (48 months) of payment can be extended to pay out over 60 months within your plan and your trustee could pay what you owe directly to the lender. Then you come out of the 13 with your car paid off. Ask your lawyer what's going to work best in your case.

[CityGirl]

I love you Irprn! You're the best!

[spell]

So nothing to do with a 7. thanks

Similar in concept is redeeming your car in ch7.

You owe a bunch more on a car than it's worth. Redemption discharges the debt above the actual value of the car.