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Bankruptcy Court Allows Debtor to Reduce Car Loan

Posted By admin || 31-Aug-2009

In the bankruptcy case of (Martinez, Erasmo; In re, (Bankr. S.D.N.Y. 2009)) the bankruptcy court ruled that the Chapter 13 bankruptcy debtor could reduce the amount of a claim secured by an automobile purchased more than 910 days before filing bankruptcy. The details of the bankruptcy case: The Chapter 13 bankruptcy debtor proposed a plan that crammed down (reduced) a claim secured by an automobile purchased more than 910 days prepetition. The creditor was owed $12,213. The vehicle's Kelley Blue Book Private Party Value was $9,430. The debtor's plan proposed to pay the creditor $9,430 plus 5.25 percent annual interest in 36 monthly installments. The court confirmed the debtor's plan. The bankruptcy court allowed the debtor to reduce the amount of the claim because he provided proof that the replacement value of the vehicle according to the Kelley Blue Book was $9,430 and the creditor did not oppose or provide evidence disputing the debtor's claim. Because Chapter 13 bankruptcy requires that collateral be valued at the replacement value, the court allowed the value stated by the Kelley Blue Book to stand.

Source: Consumer Bankruptcy News, Volume 19, Issue 18, pages 11-12

Categories: Bankruptcy, Lawsuits
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