Cram down for Clunkers

Chapter_13_Cramdown

A few years ago the U.S. government established a program called ‘cash for clunkers.’ Essentially, the idea was to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle.  The program was moderately successful.

Chapter 13 provides a huge benefit for people with older car loans. Through Chapter 13, you can ‘cram down’ the total car loan to match the current market value of the car. For example, if you own a car worth $5,000 but your loan balance is $10,000, then you can cram down your loan to $5,000 (the value of the car) through your Chapter 13 repayment plan.  The remaining $5,000 of the balance will be lumped in with your other unsecured debts (like credit cards). This means you’ll likely pay only a percentage of that unsecured debt, and the remainder will be wiped out at the completion of your plan. This means you will end up owning the car free and clear at the end of the bankruptcy.

The only catch with this is that your loan has to be over 910 days old (about 2 1/2 years). So- if your car is older and you are facing financing difficulty- then Chapter 13 may be a good option for you. Call today for a free consultation to consider your options.

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About Jason

My name is Jason Richards, and I am an attorney in Northern Utah. I run my own practice and have offices in Ogden and North Salt Lake. I grew up in Ogden and attended local public schools. I graduated from the University of Utah Law School with a juris doctorate degree. My practice primarily centralizes on bankruptcy and debt collection. I also specialize in criminal defense and other areas of civil litigation. I represent clients who are suffering from crushing debt that seems hopeless. I have helped many people file for relief under Chapter 7 and Chapter 13 of the United States Bankruptcy Code. I have also helped dozens of clients renegotiate their debt and defend them in debt collection actions with ruthless creditors. If not dealt with promptly and aggressively, creditors will achieve their goal to collect. Bankruptcy is certainly not the solution for everyone. Everybody's situation is different. The best way for you to determine if it is right for you is by consulting with a local bankruptcy attorney. Bankruptcy has helped millions of Americans receive a fresh start and financial independence.
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