You Can Keep Rent To Own If Your In Chapter 13 Bankruptcy its called the cramdown

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You Can Keep Rent To Own If Your In Chapter 13 Bankruptcy its called the cramdown

 

if you are committed to keeping your rent to own items at all costs, you do have a fairly good option: treat the rent to own account as secured debt, “cram down” the debt to the items’ fair market value, and pay this reduced amount through your chapter 13 plan. This can be done by describing the rent to own account as secured debt, amounting to a disguised purchase money loan, in your chapter 13 plan. The bankruptcy law states that upon confirmation by the court of a chapter 13 plan, creditors and other parties are legally bound by the plan’s provisions. If the rent to own seller fails to object to the plan, it is bound by the plan, and it cannot seek repossession of the items.

If a chapter 13 plan proposing the above treatment of a rent to own account is confirmed, all you need to do to retain the items and obtain a discharge of the rent to own account is to complete your payments to the trustee pursuant to your plan.

 

 

Digging deeper into this what is a “cram down”

 

A “cramdown” is the imposition of a bankruptcy reorganization plan by a court despite any objections by certain classes of creditors. A “cramdown” is often utilized as a part of the Chapter 13 bankruptcy filing and involves the debtor changing the terms of a contract with a creditor with the help of the court.

 

Cramdown Rundown

 

Cramdowns are reductions in the amount owed to creditors, often part of a Chapter 13 bankruptcy filing.

Cramdown provisions allow bankruptcy courts to ignore objections by creditors to recognize debts.

Cramdowns are often used with secured debts, such as auto and furniture, but not permitted for mortgages on primary residences.

The term “cramdown” comes from the idea that the loan changes are “crammed down” creditors’ throats.

Secured creditors will often do better in a Chapter 13 reorganization than unsecured creditors.

 

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