What is a Cram Down?

As the economy continues to struggle in the grips of the recent recession, many people are discussing the possibility of a court-issued “cram down” in order for courts to help debtors rebuild their lives after filing for bankruptcy. A cram down is typically used for Chapter 11 bankruptcy, and allows courts to modify loan conditions to help both creditors and debtors.

If you are suffering from severe debt and need a way out, you may need to consider filing for bankruptcy. This can give you the chance to start over financially and take control of your life. Contact the New Orleans bankruptcy lawyers of the Law Office of David D. Kervin, Jr., LLC, today at 504-599-5906 to speak with a qualified bankruptcy attorney about your options.

How Cram Downs Affects Loans

Cram downs occur when banks take action and modify loan terms so that debtors can repay them easier. Cram downs were very popular in 2008 in order to help mortgage borrowers avoid foreclosures. A cram down affects loans by:

• Taking control of the relationship between the creditor and debtor

• Restructuring the loan value on primary residences

• Potentially disrupting values of other properties that exist on loan values

Unfortunately for some debtors, bankruptcy courts are still not permitted to get involved in cram downs. Some financial experts argue that in the long run, they do more harm than good for all parties involved.

Contact Us

If you or a loved one is considering bankruptcy as a form of debt forgiveness, you need the assistance of a qualified bankruptcy attorney to help you through the process. Contact the New Orleans bankruptcy lawyers of the Law Office of David D. Kervin, Jr., LLC, today at 504-599-5906 for more information on what we can do for you.