Tag Archives: bankruptcy law

Vehicle Cramdown in Chapter 13

Chapter 13 bankruptcy, also called a Wage Earner’s Plan or an individual debt restructuring, is a powerful tool for people whose debts have become insurmountable. It is appealing to homeowners because Chapter 13 bankruptcy stops foreclosure sales and allows people more time to cure debts such as past due mortgage payments. Most people do not realize that Chapter 13 works similarly for certain vehicles when the vehicle loan is greater than the value of the car. Many people suffering from overwhelming debts are underwater on their cars, and losing their primary method transportation could be a potential disaster. People who are upside down on their car loans can use a Chapter 13 procedure known as “vehicle cramdown” to reduce the amount they owe. If you owe more than your car is worth, it is possible to “cram” the total debt down to the fair market value of the vehicle. For…
Read More »

Posted in Bankruptcy, Consumer Credit | Tagged , , | Comments Off on Vehicle Cramdown in Chapter 13

Another City Files for Bankruptcy

(MSNBC) Central Falls, RI – The city of Central Falls, Rhode Island – one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession – has filed for bankruptcy. The Chapter 9 bankruptcy filing marks a symbolic blow as state and local governments struggle to pull themselves out of the recession. The smallest city in the smallest U.S. state made the filing Monday as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. “A bankruptcy filing is sort of an endgame over years and years of economic distress, so it’s not something your typical U.S. town or city is likely to experience anytime soon,” he said. There have been only 624 municipal bankruptcies under Chapter 9 of the U.S. Bankruptcy Code since 1937, with five occurring last year,…
Read More »

Posted in Bankruptcy - Business | Tagged | Comments Off on Another City Files for Bankruptcy

Supreme Court Rules In Bankruptcy Case

Supreme Court Justice Elena Kagan has delivered her first majority opinion, siding with a credit card company in a bankruptcy case. The dispute involved the 2005 bankruptcy law enacted by Congress to ensure that people who file for bankruptcy pay part of their debt if they can afford it. The lower courts have disagreed on how to calculate a debtor’s disposable income under the standardized methods specified in the law. In the case before the court, a Nevada man named Jason Ransom, in filling out the forms, claimed the standard $471 monthly car payment b though he owned his car free and clear. The credit card company objected, noting that with the car repayment deduction, Ransom had just $210 per month in disposable income that could be used to repay his debt over five years, versus $681 in disposable income each month without the deduction. By an 8-to-1 vote, the…
Read More »

Posted in Bankruptcy, Consumer Credit | Tagged , | 1 Comment