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cram down chapter 13

1973 Lincoln Town Car

1973 Lincoln Town Car

cram down chapter 13

Cramming Down your Auto Loan: How to Lower Your Interest Rate and Increase the Amount of time to Pay Off your Car!

How to lower the interest rate on your auto loan.  How to increase the amount of time to pay off your auto loan. How to lower your payments. It’s all a part of filing a Chapter 13 Bankruptcy and properly modifying your loan in the bankruptcy plan.

Here’s how it works:

If your car was purchased more the 910 days in the past and the current loan was used to purchase it…oftentimes referred to as a “purchase money loan” you are allowed to both reduce the total loan balance to the appraised value of the car on the date of filing your bankruptcy PLUS you can also reduce the Interest rate the Till rate. The Till rate is :

PRIME RATE (Click Here for Today’s Prime Rate) + RISK FACTOR (1-3%)

TILL v. SCS CREDIT CORPORATION, 124 S. Ct. 1951, 158 L. Ed. 2d 787, 541 U.S. 465 (S.Ct., 2004)
To Read More about Till Case, Click the Attached link:
TILL v. SCS CREDIT CORPORATION

 

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Example:

Jeff’s 2002 Mitsubishi Galant is worth $2400.00. Jeff’s automobile loan is with Wells Fargo. The loan balance at the time of filing his Chapter 13 bankruptcy was $5500.00. The interest rate on this his loan was 22%. He had 24 payments left on his loan. Jeff’s attorney modified the loan as follows in his bankruptcy plan:

Balance to pay off: $2400.00 (This is the current appraised value of the auto)
Interest Rate of Loan: 6.25% (Current Prime Rate of 3.25% plus maximum risk factor of 3% from the Till case.)

What is my auto loan is only 30 days old?

No problem, you can still modify the interest rate down to the Till rate of Prime Rate + Risk Factor BUT YOU CANNOT reduce the loan balance amount.

In this example, Jeff’s 2002 Mitsubishi Galant is still worth $2400.00. Jeff’s automobile loan is still with Wells Fargo. But the loan is only 30 days old and the balance is $5500.00. The interest rate is 22%. Jeff still has only 24 payments to go, but the loan is only 30 days old. In this case:

Balance to pay off stays at $5500.00
Interest Rate of the Loan goes to: 6.25% (Current Prime Rate of 3.25% plus maximum risk factor of 3% from the Till case).

Summary:

Chapter 13 Bankruptcy offers the ability to modify an automobile loan by either reducing the interest rate to Prime Rate Plus a Risk Factor or both reducing the interest rate AND reducing the loan payoff amount to the appraised value of the automobile depending on whether the auto loan is 910 days or older. The Till case is a watershed case that has been followed for years in providing for this treatment of the interest rate. However, the Bankruptcy Act of 2005 added the 910 day rule.

For more information about Chapter 13 Bankruptcy in Illinois, please call NLO Nelson Law Office at 877-GO-GO-NLO (877-464-6656) or email NLO Nelson Law Office Information

file bankruptcy on your own

Clear Lake Iowa

Clear Lake Iowa

file bankruptcy on your own

  • Schedule Your Free Bankruptcy Consultation




File your own bankruptcy.  File your Chapter 341 documents, reaffirmation agreements, filing fee and attend your own Chapter 341 meeting.  How Hard Can it Be?  Avoid Attorney fees and file it on your own.  Warning – it will take a lot of time.  Great for disabled, unemployed or low income filers with uncomplicated cases.  Chapter 13 is practically impossible to do properly on your own, but can be done.  Usually people start it on their own and add an attorney later.

Ever wondered how to file a bankruptcy on your own? Well wonder no more, here is the quick 5 minute course on how to do it!

1. Fill Out the Required Bankruptcy Forms – Link to Official Bankruptcy Forms!
2. Take your pre-bankruptcy credit counseling course at least one calendar day prior to your filing – Link to an Example of Court Approved Credit Counseling Agency!
3. File your bankruptcy by going to the Federal Clerk of Court in your district – Link to Information about Where to File!
4. Submit your Chapter 341 Documents within 14 days to the bankruptcy – Link to Information on how to submit your 341 documents!
5. Attend your 341 Meeting
6. Wait for your Discharge Order!
7. Need Help – Contact the Bankruptcy Assistance Desk – Link to the Help Desk!

8.  Link to “Guide for Individuals filing without an Attorney”, by United States Bankruptcy Court for the Northern District of Illinois.

That’s it.  How hard can it be?  Avoid attorney fees and file it on your own.

So what’s the catch? Why do people use attorneys in probably 95% of all cases:

• What do you fill-in the forms?
• How do I reaffirm a debt, such as to keep my car or home?
• How do I fill out the means test?  It’s worse than doing my taxes!
• What do I say and do at my 341 Meeting of the Creditors?
• Should I be using a Chapter 13 bankruptcy for my higher income and/or need to save my home?
• What is a motion for relief from stay?
• Why has the trustee filed a motion to dismiss?

Bottom line – filing on your own is a good option when you have a lot of time on your hands and can go to the bankruptcy assistance desk to help along the way to confirm your filings are done right. This is great for people who have racked up a lot of debt say $60,000 in credit card debt are now unemployed, getting harassed by creditors and will not likely be re-employed for at least one year. This is true of people in the construction business and other long cycle industries. Another good application for filing on your own is when you have made a lot of money in the past, have lots of debt and then suffer a disability which becomes permanent leaving you with an income that is often only 20% of your former income. In this case you won’t be taking on more debt in the future and you are really in no danger of a lawsuit or garnishment, but you simply want to clean up and get rid of all of the old debt so that you can focus on your new life. Many times these folks will do best using legal aid associations providing pro-Bono – free bankruptcies. One large organization that is used in Cook County is: Legal Assistance Foundation of Metropolitan Chicago.

For a free 1/2 hour bankruptcy consultation to learn whether you qualify for debt relief under bankruptcy or should even consider filing on your own, please call 877-GO-GO-NLO (877-464-6656) or email your request for a consultation to us at info@nelsonlawoffice.com.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. CALL 877-GO-GO-NLO (877-464-6656) FOR A FREE BANKRUPTCY CONSULTATION TODAY! SATURDAY APPOINTMENTS ARE AVAILABLE.