cram down of investment property in ch 13
Posted: Tue May 21, 2013 10:05 pm
Kirk: cram down is the amount you can force as the payment in a 13,12, or 11 to a class of creditors, So you are referring here, to a cram down amount. Strip down is the amount you have to pay a single creditor (in most cases) due to 506a and d.
d
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On May 14, 2013, at 7:21 AM, Kirk Brennan wrote:
> I meant strip down, not cram down, as this relates to a chapter 13 case.
>
> On May 14, 2013 12:04 AM, "cdcbaa" wrote:
>>
>> The cram down amount is the amount you have to pay each class, including the unsecured creditors, to pass the chapter 7 test. (don't forget, if you bifurcate a claim, part is unsecured and you must pass the chapter 7 test with regard to the unsecured portion of the bifurcated claim.)
>>
>> In a 13, the max term is 60 months, so yes, if you want to avoid chapter 11, 60 months is the max in a 13.
>>
>> d
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>> On May 9, 2013, at 9:20 AM, Kirk Brennan wrote:
>>
>>>
>>> So the cram down has to be paid in the 5 year period?
>>>
>>> On May 9, 2013 9:00 AM, "sambenevento" wrote:
>>>>
>>>>
>>>> The trustee will object if the Debtor is subsidizing the property. This can be avoided if the plan proposes a straight-line amortization of the cram down amount over 60 months - and then make sure that the rental income covers the portion of the plan payment that is attributable to the cram down, plus holding expenses (such as anticipated repairs, taxes, insurance). That is why these rental real estate cram downs seem to work much better on very low end properties. If the property is too valuable, then you might have to try an artificially low plan payment (consistent with the rental income) and have a balloon payment toward the end of the plan. But you have to show how the balloon payment is going to be generated (sale/refinance of the property?). This latter type of plan will likely draw the objection.
>>>>
>>>> --- In cdcbaa@yahoogroups.com, Kirk Brennan wrote:
>>>> >
>>>> > Non-resident of California wants to file a chapter 13 to cram down (motion
>>>> > to value) an investment property owned in California.
>>>> > Anyone see a problem with that?
>>>> > Is an opposition to confirmation by the ch 13 trustee that the property is
>>>> > not necessary for a reorganization likely?
>>>> >
>>>> > Thanks,
>>>> > --
>>>> > Kirk Brennan
>>>> > California Law Office, P.C.
>>>> >
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