Northfield, OH asked in Bankruptcy for Ohio

Q: In Northern District of Ohio Bankruptcy Court, is requesting cramdown via plan sufficient or a motion has to be filed?

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3 Lawyer Answers
Kevin M Ryan
Kevin M Ryan
Answered
  • Bankruptcy Lawyer
  • Loxley, AL
  • Licensed in Ohio

A: Assuming your are talking about a car loan, the loan must be at least 910 days old for you to " cram " it down, which means paying only the current fair market value as secured and making the balance over and above that unsecured. A cram down should coincide with a plan that offers less than 100% to unsecured creditors, because the crammed balance is unsecured debt. In Cleveland, you need to list a cram down under Article 4(B) of the official Plan and reduce the interest rate to prime plus a point or two, otherwise the Trustee will pay the claim according to the creditor's Proof of Claim. Also, be familiar with the Till case.

David Michael Benson Esq
David Michael Benson Esq
Answered
  • Bankruptcy Lawyer
  • Cleveland, OH
  • Licensed in Ohio

A: Since the mortgage cramdown legislation died last year, I am assuming you are referring to car loan cramdowns. Mortgage lien stripping is still permitted (severing the lien on a junior mortgage when the senior mortgage is greater than the value of the property), but cramming down loans to the value of the property does not apply to residences. Investment property, however, is another matter and you may be able to cramdown those loans.

As far as car loans are concerned, cramdown is limited to vehicles purchased more than 910 days prior to filing. These do not require a separate motion, but can be listed in the plan as crammed down obligations. Lien stripping, on the other hand, does require a motion and notice of hearing.

Good luck.

- BensonBankruptcy.com

In Chapter 13,

David Michael Benson Esq
David Michael Benson Esq
Answered
  • Bankruptcy Lawyer
  • Cleveland, OH
  • Licensed in Ohio

A: Since the mortgage cramdown legislation died last year, I am assuming you are referring to car loan cramdowns. Mortgage lien stripping is still permitted (severing the lien on a junior mortgage when the senior mortgage is greater than the value of the property), but cramming down loans to the value of the property does not apply to residences. Investment property, however, is another matter and you may be able to cramdown those loans.

As far as car loans are concerned, cramdown is limited to vehicles purchased more than 910 days prior to filing. These do not require a separate motion, but can be listed in the plan as crammed down obligations. Lien stripping, on the other hand, does require a motion and notice of hearing.

Good luck.

- BensonBankruptcy.com

In Chapter 13,

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