In a Chapter 13 Bankruptcy, Using the Principle of “Cramdown” to Reduce the Principle Owed on Your Car

by DeLadurantey Law Office, LLC on September 5, 2013

GiftCarWhether you buy a new or used car, the moment you drive it off the car lot it loses value.  Let’s say you buy a $45 thousand car in 2010.  Three years later you find yourself in a situation where your debts have become so onerous that you cannot stay current on paying your bills, including your car payments.  After reviewing your situation with, its determined that a Chapter 13 bankruptcy, with a repayment plan to pay back your creditors over a 3 to 5 year period, is the best way to take control of your financial predicament.

You still owe $30 thousand on your car, but it is now only worth $20 thousand.  Since the creditor would only get the $20 thousand if the car was seized and sold, this is also the amount that the Bankruptcy Court would consider “secured.”  Because you bought the car more than 910 days before you filed for bankruptcy, your bankruptcy repayment plan offers to pay back the creditor only the current value of the car.  The remaining $10 thousand becomes an unsecured debt, gets lumped with your other unsecured debts, such as credit cards, and is likely then discharged and wiped out after you complete your repayment plan.

Furthermore, In re Till is regularly used to reduce the interest rates on car loans for our Chapter 13 bankruptcy clients.

Download your free copy of “Bankruptcy Secrets “They” Don’t Want You To Know.”

Contact the “Milwaukee Foreclosure and Bankruptcy Attorneys,” DeLadurantey Law Office, LLC.   DeLadurantey Law Office, LLC focuses on Chapter 7 and 13 bankruptcy, debtor’s rights, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense.  A “defender of the little guy,” DeLadurantey Law Office, LLC serves the following location – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County.


DeLadurantey Law Office, LLC: (414) 377-0518.


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