What Everyone Should Know About Cramdowns

Filing for bankruptcy isn’t always as black and white as many people believe. In many cases there are ways a debtor can improve his or her financial situation before filing for bankruptcy. One way a debtor may be able to reduce the principal on some of his or her debt is by receiving a cramdown. This action is common with those filing for Chapter 13 bankruptcy because it allows them to move secured debts to unsecured debts. This can greatly help one’s ability to handle debt and help them get out of debt faster.

As more people continue to struggle financially during the current economic state, filing for bankruptcy has become a common way for people to get out of debt and on with their lives. If you or someone you know is struggling to pay your bills, contact the Arizona bankruptcy lawyers of the Harmon Law Office, LLC today at 480-829-0494 and schedule a free consultation.

Information You Need to Know About Cramdowns

Bankruptcy and the process of cramdowns can be a very complicated and involved process. That is why it is important to make sure you understand cramdowns before you file for bankruptcy. Make sure you understand the following about cramdowns:

• There are time restrictions on cramdowns – to prevent people from purchasing brand new items and immediately cramming them down, you must own products for a number of days before you can cram them down. Typically the time limit is at least one year.
• Cramdowns can only be applied to certain secured debts – you are only allowed to cram down secured debts. Typically, this includes property that can possibly be reprocessed.
• A cramdown reorganizes secured and unsecured debt – by moving secured debts to unsecured debts, debtors are able to pay back debts based on less strict regulations.

Contact Us

To speak with a qualified legal representative about your options for getting out of debt, contact the Arizona bankruptcy lawyers of the Harmon Law Office, LLC today at 480-829-0494.