Cram down question

[95kindebt]

We are cramming down our 2002 tahoe, hubby just asked if we own the car at the end of the 5 year plan. Do we get the title then? And we're not liable for the amount we got to "deduct" cramming it down right?

Also, what happens to the car "payment" we are currently making in our budget, when we cram down, does it increase our NDI? since we will be paying through the plan? our car pymt is $515, it's not going to be "gravy money" since it's crammed down right?

These are Dh's questions.

THANKS!

[optimistic1]

It does increase your DMI by cramming it, and I believe this is where an experienced paralegal or attorney would then cushion some other expenses while still paying all of your obligations, but who knows, I asked them the same questions.

The basis for it increasing your DMI is so that the other creditors like unsecureds might get some or even more money than if you didnt cram it.

You wont be liable for it as long as you complete your plan.

Tell me this,

What is the current condition of your Tahoe, how many miles.

[MSbklawyer]

We are cramming down our 2002 tahoe, hubby just asked if we own the car at the end of the 5 year plan. Do we get the title then? And we're not liable for the amount we got to "deduct" cramming it down right?

Right. You get the title. To the extent the debt exceeds the fair market value of the vehicle, the debt is treated as unsecured. That portion of the debt will get treated just like all other unsecured debt in the plan.

[Flamingo]

We are cramming down our 2002 tahoe, hubby just asked if we own the car at the end of the 5 year plan. Do we get the title then? And we're not liable for the amount we got to "deduct" cramming it down right?

Also, what happens to the car "payment" we are currently making in our budget, when we cram down, does it increase our NDI? since we will be paying through the plan? our car pymt is $515, it's not going to be "gravy money" since it's crammed down right?

These are Dh's questions.

THANKS!

Both our crammed vehicles were paid off prior to the close of our Chapter 13. Both creditors were listed as secured lenders in our plan and the titles were sent to us when the creditor received the last payment due them under the plan.

Your attorney will obtain the fair market value of your vehicle and cram that portion into your Plan (and maybe add some interest to keep the creditor happy). Your car payment is not "gravy" money as the other posters have explained to you.

[95kindebt]

the tahoe is a 2002, great condition 110k miles

[95kindebt]

we are upside down in it by 9k

[optimistic1]

Sounds like it is worth around 10,000.

Your interest rate would most likely be the Till rate, which is the Prime rate plus 1-3% extra. Or your local BK court might already have a percentage already setup in the Ch.13 plan form.

Another Ch.13 poster in here named BigJohn even got a 0% interest rate somehow.

Lets say its the Till rate though, which is 3.5% + 3.0% just to be safe, your new rate is 10,000 @ 6.5%.

When you know what exactly needs to be paid in your chapter 13 plan, go to this link and use the funding wizard. Enter in your DMI and your plan length, then enter in your debts that must be paid into your plan. This is where you list the crammed down amount for the Tahoe, make sure you add the new interest rate in. This is also where you enter in attorney fees that are put into your plan. In the end it basically shows you how and when each debt is paid off in order of importance, like secured priority, unsecured priority, etc, and it also shows if your plan is even feasible based on what needs to be paid and how much DMI you have. Dont bother entering in your unsecured debts, unless you live somewhere where they require you pay unsecured's 10%.

http://maney13trustee.com/mcfndwz.htm

[kellmaestra]

My experience with a cram-down on my husband's car is a nightmare. If we had known how the cram-down really works before filing for bankruptcy, we would have given up his car and bought something newer.

We owed more on the Durango than it was worth at the time of the bankruptcy. Our attorney suggested a cram-down since we wanted to keep it. So $5900.00 of the autoloan was included in the secured part of the chap 13 and the balance $3100.00 was included in the unsecured part. We are paying 100% on the unsecured part.

His Durango was paid off 7 months ago (secured part). When we didn't get the title, I called about it. The attorney then told me that we have to finish out the bankruptcy to get the title. The Durango now needs a new transmission which will cost more than it's value of $1200.00.

Kelley

[optimistic1]

I dont even know why they bothered to cram your loan down, if you are paying 100% of unsecured, it sounds like they didnt cram anything, just included it in your plan.

I do agree, that brand new cars are essential to completing a Ch.13 plan, especially 5 year long plans.