Can I cram down my Primary Residence in a Chapter 13 Florida Bankruptcy?
With the recent housing collapse, many people are underwater or upside down on their homes. In some instances, a Chapter 13 can give relief on a second mortgage or Home Equity Line of Credit ("HELOC").
However, if the junior lien holder has some security interest in the property, it cannot be "stripped" if the property is their personal residence. If the property is an investment property, the liens may be subjected to "cram down." Cram down essentially means the debtor equates the value of the home with what is owed on the house. However, whatever secured portion the junior lien holder holds, must be paid off during the Chapter 13 plan.
The unsecured portion will receive a pro rata share of whatever the unsecured creditors are receiving and the balance will be discharged at the end of the plan. If the debtor(s) do not complete the plan, then the cram down is ineffective and the lenders will retain their ordinary liens.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
