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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 18804
Experience:  B.A.; M.B.A.; J.D.
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on a bankruptcy for one to foyr family house can you lower

Resolved Question:

on a bankruptcy for one to foyr family house can you lower the interest and principal balance as process known as cramdown?......in new jersey
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 8 years ago.

Yes, the cram down/strip down applies to investment properties and second homes. This is done as part of the Chapter 13 plan.

Currently, Bankruptcy Judges can modify (“cram down,” “strip down”) the terms of mortgages on second, third homes, investment properties, etc. but do not have the power to do that for the primary home. In a cram down situation, the Court has the power to strip down the amount outstanding on a mortgage to the current appraised value of the home, then payment can be modified, interest rates can be modified allowing the borrower to make payments that she/he can afford.

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Customer: replied 7 years ago.

I receive your answer it was satisfactory however I have contacted several local attorneys to confirm the answer and they all have disagreed can you advise me where can Ijustify it. Is there any additional fees please advise me.

 

Thank you.

 

Luis Sanchez

Expert:  Phillips Esq. replied 7 years ago.

Hi Luis:

I would be more than willing to clarify.

My understanding is that the 1-4 family is your investment property. Under current bankruptcy rules, you can modify the terms of that loan. This the cram down/strip down situation. Thus, I stand by my previous assessment of your case. See 11 U.S.C. Section 1322 (read the whole section); Also see subsections 1322(b)(2); 1322(b)(3)and (b)(5); 1322(c)(1)and (2):

http://www.law.cornell.edu/uscode/uscode11/usc_sec_11_00001322----000-.html

Phillips Esq. and 2 other Bankruptcy Law Specialists are ready to help you