How Can the Cram Down Be Of Your Advantage of Filing Chapter 13 Bankruptcy

June 14, 2010 - PRLog -- If you are planning on claiming bankruptcy, you should know the difference between secured and unsecured type of debts. The debts for which your asset is liable it is called secured type of loan. It can be your a car, furniture or house. Nonetheless the cram down alternative is not offered for your house.

Once you have purchased a loan, you start paying monthly installments and you slowly but surely see that the article that you have financed loses its value faster than you are repaying the loan. This is normally called upside down loan where the loan amount is more than the value of the item purchased. It is usually seen that in a year or so the value of the item bought falls down than the amount that is still owed by the lender.

Such debts are crammed down when one files Chapter 13 bankruptcy. This is achieved by repaying the value of the property in full and also the interest with the outstanding balance. This is usually seen with items like furniture or car. The another essential merit of Chapter 13 bankruptcy is that you are no longer needed to pay interest rate that you have been paying on your secured loans but the rate of interest is revised. This however, does not imply on your mortgage. Before you can actually file for the bankruptcy you will have to go through the bankruptcy consultation. After your sessions you will get a better idea of how the Chapter 13 works. This is the right time when you can make a list of Chapter 13 Bankruptcy Faq and get them clarified.

There are several people who take car or furniture loans with 15%-30% interest or even more. With Chapter 13 you are only suppose to repay it at the prime rate plus 1-3%. This would be determined on the basis of your case. People who go for filing Chapter 13 bankruptcy end up saving thousands of dollars every year. If you can no longer pay your monthly installments and have secured loan then you should consult personal bankruptcy lawyer today.

If you are stuck with secured loans whose monthly installments is either getting difficult to pay or you know you will not be able to pay in near future then you should take benefit from Chapter 13 Bankruptcy. http://www.bankruptcyonly.com/chapter-13-bankruptcy.php

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