Question What is 'cramdown?'

[StartinOver]

I've seen a term being used regarding mortgages or car loans - cramdown. What is it, how does it work, why would one want or not want this to occur?

[SMinGA]

Cramdown can be done for car loans in a ch. 13 when your car is worth less than what you owe on it AND you bought it 2 1/2 years before filing.

The loan is converted into 2 sections: secured by the value of the car, and the rest is unsecured. The secured part is paid in the plan, the unsecured is treated the same as all other unsecured where it is repaid in part (may be none or very little depending on the plan) and then discharged at plan completion.

The method to determine valuation depends on the district. For mine, they use NADA retail. As in, what you can expect to pay for the same year/model at a dealership now. So in my district its hard to get a cramdown as that is one of the highest valuations possible.

There is no cramdown on home loans that I am aware of. However, if you owe more on the 1st than the home is worth, then junior liens (2nd, heloc, etc.) can be stripped thru a 13 and treated as unsecured.

[StartinOver]

OK, cramdown doesn't apply to me, then, but I'm glad to understand it when I read the term.

I don't think stripping the second will apply, either, as I don't expect our house will appraise at less than the first mortgage, though it would come in close to or under the combined first and second. Still hope springs eternal, and so I'm inquiring for a market analysis of the property. It's been a year since the analysis I got that told me it could sell for 265 to 272K (secured debt on the property totals 272K).

We had a consult this morning with an attorney. I'm still digesting everything else he said, and I spent the last two evenings communing deeply with my bank statements, and paystubs, and debt statements. I've kind of known a long time that we were in a tunnel and I thought that I could see light. I haven't slept in 2 nights and I feel like I just got run over by the train.

I'll post another thread when I have questions formulated so they make sense and are not just a swirling mass of negative numbers and a loud screaming noise that seem to be coming from me.

[workingboy]

Hang in there StartinOver. Many of us had the same feeling(s). Believe it or not (at least from my experience), it gets better. The most difficult thing for me was actually filing. Good luck.

[StartinOver]

Hang in there StartinOver. Many of us had the same feeling(s). Believe it or not (at least from my experience), it gets better. The most difficult thing for me was actually filing. Good luck.

Thanks, workingboy!

BTW, your 341 (you said 342 in your sig, is it different for different chapter filings?) is on my birthday. So I'm wishing you a happy 341 day! I can't imagine my birthday is going to feel like a good milestone this year. Another year older and an opportunity to lose it all in a big puff of smoke is all I have to show for myself. Meh!