Search Site
Menu

How Georgia Bankruptcy Filers Can “Cram Down” Secured Debts

Woman going through bills, looking worriedPeople in financial straits sometimes opt for a Chapter 13 bankruptcy, which lets them keep their property while they pay off either all or a reduced portion of their debt over time. Although it affords some relief, a Chapter 13 plan still puts pressure on debtors to repay. However, there is a way for them to further lower the amount owed to creditors, known as a “cramdown.”

Under Section 1129(b) of the Bankruptcy Code, the debtor can propose a plan that proposes to pay a secured creditor less than the full amount owed.  This is known as a cramdown. Generally, the cramdown process involves reducing the principal balance of the loan to the market value of the property. For example, if a debtor owns a car that is worth $10,000 but has a $15,000 car loan, the plan can propose to pay $10,000 as secured with a low interest rate and pay the remaining $5,000 as unsecured without interest.

There are certain restrictions to the cramdown provision. For example, a car loan will not qualify for cramdown unless the debtor has owned the car for at least 910 days (2.5 years). This prevents someone from filing for Chapter 13 bankruptcy to cramdown a car loan immediately after purchasing the car. For other personal property, the required ownership period is one year.

If you are considering a Georgia bankruptcy, contact Jeff Field, a veteran Georgia attorney with over 30 years of experience helping debtors put their financial worries behind them and start working towards their new financial future. Call 404-381-1278 to schedule a free consultation with Jeff Field & Associates today. You can also contact us online. Our main office is located in Scottdale and we also have offices in Gainesville, Marietta, Athens, Lawrenceville and Douglasville.

Leave a Reply

Your email address will not be published. Required fields are marked *

Videos
Our Attorneys
Client Reviews
  • google
    5.0/5.0

    I have done business in the past with Jeff Field and Assoc. and highly recommend them to my family, friends and colleagues. I worked closely with Casey and Chris whom made the stressful process so much easier. I was able to rectify my issue in less t...

    Read more

    Hema Juman

  • lawyers
    5.0/5.0

    I chose Jeff Fields and Associates because of the positive reviews I read. My experience with them was very nice. Everyone I had the pleasure of working with was very professional and knowledgeable. Ms. Mai and Chase Butler were very quick too respon...

    Read more

    Client

  • lawyers
    5.0/5.0

    One of the best groups of people I’ve ever worked with. Fantastic company with employees who actually care about your personal experience during an awkward time. I hardly write reviews but wanted to let others know where to go if they happen to eve...

    Read more

    Client

  • lawyers
    5.0/5.0

    Working with Jeff Field & Associates was a pleasure. My attorney and case manager were awesome. They made this journey as smooth as possible and overall just very professional. I will recommend their services to anyone who is seeking help in gettin...

    Read more

    Client

  • google
    5.0/5.0

    This was by far a seem less process. Everyone was extremely helpful and a joy to work with. They answered all of my questions and followed up quickly when needed. Needless to say, I would definitely recommend their services to all of my friends and f...

    Read more

    Jason Barnes

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form