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The benefits of a cramdown in Kentucky

When someone files for Chapter 13 bankruptcy, one option that is available to help them pay back their creditors is a loan cramdown.

Cramdowns are available for individuals who have negative equity in a car, meaning that they owe more on the loan than their vehicle is worth. 

To be eligible for a cramdown, people must have owned a vehicle for at least 910 days, which works out to about two and a half years. Additionally, payments for the vehicle, including future and back payments, must be included in a person's Chapter 13 repayment plan.

Once someone has been determined to be eligible for a cramdown, they'll need to negotiate with their lender to restructure the loan. People should be aware that even if they are able to arrange for a cramdown, their vehicle can still be repossessed if they don't make the payments that they agreed to.

The benefit of a cramdown is that people can save thousands of dollars on the total cost of their vehicle since they'll only be required to pay for the actual value of their vehicle, which will normally go down significantly after it is purchased.

If someone is considering filing for bankruptcy, a lawyer could explain the process to them and what the requirements are for filing.

The most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 bankruptcy allows people to have debts discharged, so lenders don't have to be paid back. However, Chapter 7 is of little help when people are attempting to keep secured property like a home or a vehicle. Chapter 13 bankruptcies require that people pay back their lenders, but they may be able to reduce their total debt and are given more time to get back on track.

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