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How Chapter 13 helps you keep personal property collateral on a debt (such as furniture bought on credit) for less money through cramdown.

Last time we explained how you may be able to reduce the monthly payments, interest, and overall cost of a vehicle loan through Chapter 13 cramdown. The debt must be at least 910 days (two and a half years) old. Plus the more the vehicle is worth less than the amount owed the greater the likely savings. (See the “hanging paragraph” after the end of Section 1325(a)(9) of the U.S. Bankruptcy Code.)

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To determine whether a “lease” is actually a disguised secured purchase, the bankruptcy court looks at the deal’s economic substance.

In our last blog post we showed how in bankruptcy a lease isn’t always a lease. A transaction labeled as a lease of personal property may actually be a secured purchase for bankruptcy purposes. We showed that when a so-called “lease” is not a true lease, through “cramdown” you can often keep the property being “leased” for much less than you’d pay otherwise.

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A "lease" of furniture or other consumer goods may actually be a disguised purchase. If so, through "cramdown" you can pay much less on it.


Our last blog post was about your bankruptcy options on leases of personal property—such as furniture or electronics. Your basic options are either to “accept” the lease or else “reject” it. When “accepting” the lease you keep possession of the property and must accept ALL of the lease’s terms and obligations. When “rejecting” the lease, you surrender the property and ALL of the remaining lease debt is discharged—legally written off. It’s all or nothing.

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Posted on in Secured Debts

Statutory liens on your home cannot be gotten rid of in bankruptcy like judgment liens often can. So it’s important to know what they are.


Statutory Liens Are Rare, Sort of

There’s a good chance you don’t have any statutory liens on your home. But you may.

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Posted on in Secured Debts

A judgment lien effectively converts a debt that was secured by nothing into one secured by your home.


Has a creditor sued you and gotten a judgment against you? If so, and you own a home, most likely there is now a judgment lien against your home.

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