WHAT IS A CRAM DOWN AND HOW CAN IT HELP ME?
“A lot of people have asked the question: what is a Chapter 13 Cram Down and how could it apply to me? And the answer is... well, a Chapter 13 Cram Down is a legal term used to describe what a Chapter 13 will do whenever you have collateral that gets paid out over the life of a Chapter 13 bankruptcy.
So, if you have a vehicle that is worth about $10,000 but you owe $18,000 on it, the Cram Down means you only pay $10,000 - the value of the collateral. For vehicles, you have to have purchased it more than two and a half years ago and for something like a refrigerator that’s bought on credit, it’s a one-year requirement. So, older items that you purchased on credit can be crammed down through a Chapter 13 and you pay the value, not necessarily the balance.
If you have any questions about a Cram Down or about a Chapter 13, in general, give us a call (210.340.8877) and we will be happy to answer your questions or you can fill out the online form (packardfirm.com) and we’ll get back with you.”