Cram-down on Auto Loan New Law Chapter 13

[txeagleair]

I have filed a Chapter 13 on February 6, 2006. I purchased my car on August 08 of 2003. This works out to be 913 days which is above the 910 days for a cram-down. I currently owe about $4,500 on an auto loan that was orginally $14,500 and the car is currently worth about $9,500. I was wondering if anyone has suggestions if it is better to include the remaining payments in the bankruptcy or not. My thinking is that if the car is only worth about $9,500 then I have paid off the secured loan in compliance with the new cram-down law in Chapter 13. Any thoughts. Thanks.

[Minnymouth]

Cannot help you with the "cram-down" issue on your auto....

It was my understanding that "cramdowns" stopped with the new laws (maybe I missed something there)???

I understood that you only owe $4,000 and the value is $9,000, right???

You may be in a position where you might have to buy back the equity in your vehicle......

I know your "thinking" - I owe $4,000 and its worth $9,000 sooooooo I shouldn't have to pay anymore on it...

Doesn't work that way.....

I understood that under the new laws the "cram-down" no longer exists...... (course I may be wrong in saying this)...

Maybe someone else on the forum, more familar with the new laws for Chapter 13 can give you some input on this issue....

Suggestions FOLKS????

Personally, I would pay the auto off outside the bankruptcy.... let all and the final payments WORK towards credit building....

[SinkingFast]

Any exemption you have available, you might apply to the equity in your car. Depends on the state, the Court, the wording of the statute/law, etc., of course. The new state we live in allows $8000 each or $16000 for joint filers. And we can use that any way we want. So much on household, so much for money in the bank, and rest on cars. However we want.

If I understood correctly, Trustees don't like to mess with stuff that has loans on it, for sale purposes that is. Evidently it can be a sticky situation for them. Trustees have to be fairly certain a vehicle will bring more than owed in the loan plus any exemption amount you may have placed on it. Then they have to pay the lender for the loan, and you for your exemption, out of the proceeds. Plus Trustees have costs for doing a sale. Typically the Trustee will say something like, "Pay me $XXXX and we'll call it even." as an example. They get some money without any hassle by offering up a settlement to you.

[StaciMM]

Cramdowns work the other way around, so they apply when you owe more than its worth. If it were worth $4000 and you owed $9000, the logic is that only $4000 of it is secured. (New BK laws limit cramdowns to vehicles you've been paying on for a while.)

Normally, in a 13, you don't lose assets. The non-exempt equity will set a minimum that you must pay back to unsecured creditors in the program thoguh.