Cramming down a car in Chapter 13 bankruptcy

Chapter 13 has some powerful aspects that can really help people with financed vehicles. In a chapter 13 if you owe more on your vehicle than the current market value(blue book) then we can restructure your financing so that you pay on what the car is actually worth. This only works if the financing is more than 2.5 years old so you can’t buy a new car and walk off the lot and get it crammed down, but it works for a lot of people and can save you quite a bit of money.

I have had clients that have been able to fund a chapter 13 plan just in the savings that they made by cramming down their car. If you owe 20k on a car and its only worth 10k then just the money you save in financing would give you 200 a month to fund a chapter 13 plan.

Although Chapter 7 can be a faster way to get debt free, a chapter 13 with its cram downs and lien strips on real property can be a valuable way to put yourself in a great position to come out ahead when your chapter 13 debts are discharged.