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Personal bankruptcy can turn the tables on creditors (part 2)

As we discussed last week, Wayne County residents working in close cooperation with bankruptcy law professionals often find that they are able to take advantage of some unique options in dealing with their creditors. Lien stripping was one such tactic that can turn the tables in your favor.

This week we're going to look at what we call loan cram downs. In some ways, a loan cram down is simpler than lien stripping. It also can potentially apply in just about any case where a debt is secured by property -- a mortgage, of course, but also a car loan or similar debt.

Let's say you bought your car brand new for $25,000. Today, you still owe $15,000 on it, but it's only valued at $7,500. Traditionally, under a Chapter 13 bankruptcy, you would be required to come up with a plan to pay off the full amount owed on that secured debt. Unlike unsecured debt, it's not eligible for discharge.

However, that doesn't have to be the end of the story. A skilled bankruptcy law professional may be able to negotiate a loan cram down, which would mean that you're only on the hook for the actual value of the car. You still have to pay that back under Chapter 13, but it's a significant improvement over having to pay back the actual amount owed.

When you think about this in the context of an underwater mortgage, where the differential between estimated value and amount owed can easily be tens of thousands of dollars, the advantages of working with a legal professional become clear. Wayne County residents may find more information on loan cram downs on our Westland Attorney for Loan Cram-Down Help page. Loan cram downs and lien stripping are highly technical legal procedures which a legal professional will have the knowledge and experience to execute successfully.

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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