cram down car question-Chapter 13 BK

I think you're using "cram down" in a context I'm not familiar with...

To me, cram down orders are usually issued by the judge. For example, if a creditor repossesses a car and the debtor files BK-13 the next day -- technically it is a legal repossession since it was done before the BK was filed, but the judge can issue a cram-down order and make the creditor give the car back nonetheless. They call it a cram-down order because it's basically "cramming it down the creditors throat".

What do you mean by cramming down your car?

UM, if you are "upside" down on your car loan, he said something about cramming it down to only have to pay fair market value, maybe I've misunderstood him.

That could work if your plan called less than 100% to GUCs...

You carnote balance really is only secured to the extent of its fair-market value. (Secured claims are always paid @ 100%). Anything over the fair-market value would be considered an "unsecured" claim and paid the same % as the other GUCs.

For example, lets suppose your plan called 10% to GUCs. If you owed $10K on your car, and it was only worth $5000, then the creditor would only get $5500 ($5000 secured claim @ 100% + $5000 unsecured @ 10%).

In your case, if your unsecured's are being paid @ 100%, then fair market value doesn't really matter since the unsecured portion would be fully paid anyway.

Thanks, that's what I thought. Do you know how its figured that you have to payback 100%?

Well, yes and no. I don't know how they come up with the term (36 v 60 mos, etc).

Outside of that, they take your income less expenses to come up with your monthly payment amount (suppose your monthly payment comes to $750). Then multiple that times the plan term (suppose 36 mos). You would pay $27000 into the plan.

Now we get the % by comparing that to your overall debt. If all your debts are less than $27000 then they will all be paid at 100%. But suppose you have $10K in secured and $30K in unsecured. Well the secured will be paid 100% leaving $17k left for the GUCs. 17K/30K = 56.6% -- so the GUC's would be paid @ 56.6%.

It does get a little more complicated, because you pay your attorney and the trustee through the plan too. But that's the overall gist of it.