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To be able to keep your property that’s collateral or security on a secured debt, you must give that secured creditor “adequate protection.”

In the bankruptcy system, debtors and creditors each get certain protections.

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A creditor’s rights over you in either Chapter 7 or 13 vastly increase if it has a security interest. Now’s the time to find out for sure.

Reaffirmation vs. Cramdown

The last four blog posts have compared Chapter 7 reaffirmation with Chapter 13 cramdown of a secured debt.

With reaffirmation you keep the vehicle or other collateral but continue to owe the debt. Usually you owe the full debt, and the monthly payments remain the same. But sometimes the debt and monthly payments can be reduced if the collateral is worth less than the balance.

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Chapter 13 cramdown doesn’t just work for vehicle loans. You can also cram down debt for the purchase of “any other thing of value.”


Our last blog post was about the cramdown of vehicle loans. Cramdown can significantly decrease your monthly payment and reduce how much you pay for your vehicle before it’s yours. To qualify, your loan has to meet some conditions. In particular the vehicle loan has to be more than 910 days old when you file your Chapter 13 case. (That’s about 2 and a half years old.)

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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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Posted on in Automatic Stay

To keep possession of your property that is collateral on a secured debt, you need to give the creditor “adequate protection.”

The Balancing of the Interests of Creditors and Debtors

Bankruptcy law attempts to balance the interests of debtors and creditors. That’s true as to how the law deals with debtors’ and creditors’ opposing interests as to the collateral on secured debts.

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