Cramdown

Cram-down refers to a creditor being forced to accept bankruptcy plan treatment of its claim. While the term best refers to chapter 11 bankruptcy where creditors have explicit votes, it is also sometimes used to refer to chapter 13 plans forcing secured creditors to modify their claims.

Blog Posts

We have discussed Cramdown in the following posts on our bankruptcy blog:

Modifying Secured Loans in Chapter 13

Jan 16, 2012

A secured loan is any loan where the lender has an interest in collateral they could potentially take to pay the debt, including mortgages, deeds of trust, liens, and car loans. For bankruptcy debtors with secured debt, they can choose to file chapter 7 or chapter 13. Chapter 13 may offer options to adjust the terms on which the secured loan is repaid. Chapter 7 debtors who keep secured property generally pay the secured loan on the same terms as before bankruptcy. In both chapters, turning the property over to the creditor is also an option. This post discusses how and in what circumstances chapter 13 can alter secured loans.

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Modify What Exactly? Modifications in Bankruptcy

Feb 27, 2014

Bankruptcy is unfortunately jargon-filled. Worse, some words have different meanings depending on the bankruptcy context. On this blog, I've previously discussed the two meanings of feasibility in bankruptcy. Another word that leads to confusion is modify and modification.

There are three common contexts where the term modify is observed:

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Stuck in a High Interest Car Loan? Chapter 13 Can Lower Rates

Jul 21, 2014

Here in North Carolina, a car is typically essential transportation. Owning a car can be vital to continued employment. Lenders and car lots know this, and are very willing to loan money to buy a car. The catch, however, is a high, sometimes very high, interest rate. A high interest rate strains a household budget, and can prolong the debt burden beyond the serviceable life of the car. Bankruptcy offers tools for consumers to get out from the burden of crushing auto loan interest.

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