non-506?? Is this related to cram-down?

[trying2getby]

On 13datacenter under my list of creditors, it shows the following:



Car#1 XYZ company $$$
Car#2 QRS company -- (non-506) $$$

[lrprn]

Section 506 is the part of the bankruptcy law that sets out what claims in bankruptcy are defined as secured claims. I'm not a lawyer, but "non-506" might indicate that your car's value is far less than your loan? Ask your lawyer for a reliable answer.

[trying2getby]

Thanks for your reply.

I will ask my attorney at our 341 mtg this week.


The value of my car is definitely way less than what I owe. I owe $14k on it and it is worth maybe 10k on a good day. I doubt I could even get 8k offered on a trade-in. It is in decent condition but has almost 90,000 miles on it. I know it will be an absolute miracle if it lasts the 5 years. I will feel lucky if it lasts 2-3. I would really like to dump it and walk but I have to have a vehicle and obviously I can't get any financing right now. I REALLY wish we would have not stayed in denial so long trying to avoid BK filing. I should have bought a newer, dependable, low-mpg vehicle back in the spring before my credit was completely trashed. (hindsight) But we were trying to "do the right thing,"... not take on more debt, keep our bills paid, etc. You know the drill...........

My attorney told me cram-downs were no longer done with the bk revision. I know I keep reading on here that they are if the car is older than 910 days (this one is older than that). Maybe it means the "current value" is secured, and the extra that we owe is "unsecured."???

[StartingOver08]

The 910 rule is not the age of the vehicle - it is how long you have had the loan with that creditor. So how long have you had the loan for this vehicle?

Also, you CAN negotiate the amount of the payment, interest rate, term, etc on your existing loan on the vehicle if you plan to reaffirm. I did. If the you come to a verbal agreement and the written re-affirmation does not match what you agreed to - don't sign it, and give the vehicle back.

Many people here say do not do reaffirmations under any circumstances - for the most part that is good advise EXCEPT when you can negotiate a better deal with the existing lender - one that you can make work for you. For some reason the attorney's do NOT do math. ATTORNEY'S DO NOT NEGOTIATE THE REAFFIRMATION - IT IS UP TO YOU. Truly it is better that way, only you know what will work for you.

[trying2getby]

Thanks for your reply.

Yeah, I bought the vehicle brand-new, so both the vehicle & loan are the same length of just over 4 years.


I have little choice but to keep the vehicle. I have no funds available to buy even a junker.