What is a Chapter 13 Cramdown?

A person filing for bankruptcy under Chapter 13 of the United States Bankruptcy Code may have the option to reduce their debts through a cramdown. Cramdowns allow debtors to take a portion of a secured loan, meaning a loan tied to some sort of collateral, and convert that into unsecured debt. This debt can be more easily worked through in the bankruptcy process and may be discharged once the process is complete.

If your debt is overwhelming your income, leaving you unsure about the future, we can help you take your first steps towards financial freedom through bankruptcy. To learn more about this process, contact Florida Chapter 13 bankruptcy lawyer Ryan J. Really, Attorney at Law, PLLC, by calling (239) 237-0675.

Benefits of a Cramdown

If a person chooses to cram down their secured loans, they may be able to make some of those loans unsecured. These cramdowns can provide the following benefits for debtors:

  • Reducing payment priorities for part of the loan
  • Having portions of loans discharged through the Chapter 13 process
  • Lowering interest rates on loans
  • Lowering monthly payment requirements

A cramdown can be a valuable tactic for debtors. The portion affected includes any changes in the value of the loan, meaning that any loss of value can be cause for a cramdown. The major exclusion for this tactic is debt tied to the principal mortgage of a person’s primary residence. These loans cannot be crammed down.

Contact Us

If you are considering filing for bankruptcy to protect your financial future, the assistance of a knowledgeable and experienced attorney can be highly valuable. Contact a Florida Chapter 13 bankruptcy attorney of Ryan J. Really, Attorney at Law, PLLC, at (239) 237-0675 today.