How a cramdown saves money
Here's an example of vehicle loan cramdown that shows how you can reduce your vehicle payments and be free and clear after paying less.
Are you Behind on Your Auto Payments
Vehicle loan cramdown doesn't just likely reduce your vehicle payments and the total you pay. You'd also not have to catch up on late payments.
Time requirements for a Cramdown on Vehicle Loan
The time requirements for a cramdown on a vehicle loan in Chapter 13 requires that your loan is at least two and a half years old. But there are exceptions to this.
Qualifying for a Cramdown
To qualify for a Chapter 13 vehicle loan cramdown, mostly your loan must be at least two and a half years old. There are exceptions to this.
Decrease your Auto Loan
If you can’t afford to pay your vehicle payments even after writing off your other debts under Chapter 7, consider decreasing your auto loan through a Chapter 13 cramdown.
Keep Your Vehicle without Reaffirmation
Can you keep your vehicle without reaffirming its loan? Can you make the payments without reaffirming? What if you can't afford the payments?
Reaffirming your Vehicle Loan
If you want to keep your vehicle and still pay on its loan, file a Chapter 7 case to write off other debts and reaffirm the vehicle loan.
The Surprising Benefits: Ending Your Vehicle Lease under Chapter 13
Chapter 7 gets you out of a vehicle lease owing nothing. Chapter 13 is more complicated but can give you pretty much the same good result.
Chapter 7 vs. 13 When Your Vehicle is Worth Too Much
Usually your car or truck is protected in bankruptcy with a vehicle exemption. Or if the vehicle is worth too much Chapter 13 can protect it.
Cramdown on Vehicle Not Bought for Personal Use
The 910-day condition for doing a vehicle debt cramdown doesn't apply if the vehicle was not "acquired for the personal use of the debtor."
Examples of Reaffirmation Agreement vs. Chapter 13
Here are examples of the reaffirmation of a secured debt (like a vehicle loan) in a Chapter 7 case vs. addressing it in a Chapter 13 case.
Reaffirmation Agreement vs. Chapter 13
When is it better to reaffirm a secured debt (such as a vehicle loan) in a Chapter 7 case vs. handling it instead in a Chapter 13 case?
The Reaffirmation Hearing
You don't need to go to a reaffirmation hearing, unless you don't have a lawyer, or he or she does not sign the reaffirmation agreement.
Reaffirming a Debt That’s Not Current
You usually have to get current on a secured debt before you can reaffirm it. But the terms of a reaffirmation agreement may be negotiable.
Be Cautious about Reaffirming a Debt
Reaffirming a debt, including a vehicle loan, can be a very sensible choice. But be fully aware of the risks and possible other options.