One benefit of a Chapter 13 bankruptcy is the auto loan cram down. Under certain circumstances, the outstanding balance on a car loan can be reduced to its fair market value. This can be very beneficial to people who are “upside down” on their car loans and owe more than their car is worth.If you have questions about auto loan cram downs and are considering bankruptcy, we can help. Call 256-534-3435.
Vehicles depreciate very quickly, and it is not uncommon for a person to owe significantly more on the vehicle than it is actually worth. A Chapter 13 cram down allows you to modify your car loan and pay less than the original terms of the loan.
For instance, if you owe $10,000 on a car, and its fair market value is determined to be $5,000, a Chapter 13 bankruptcy will strip $5,000 of debt off of your shoulders and give you three to five years to pay the remaining balance.
In order to qualify for an auto loan cram down, you must have purchased the vehicle no sooner than 910 days prior to the bankruptcy filing.
To determine if you are eligible for an auto loan cram down, it is important to consult with an experienced Huntsville, Alabama bankruptcy attorney.
For a free initial consultation about filing for bankruptcy, call 256-534-3435. We understand auto loan cram down laws and we are here to help.