Cramdown reduces a car loan to the vehicle's actual value and pays only that amount as secured debt through the plan. The rest of the balance drops into the unsecured pool with the credit cards.
There's a date test. If you bought the car for personal use within 910 days before filing, cramdown is off the table. That's about two and a half years.
The date is the whole game
Count back 910 days from your filing date to the day you purchased the vehicle. Purchase date, not the date the loan was refinanced. If the purchase falls outside that window, cramdown is available. Inside it, you pay the full loan balance to keep the car.
For other personal property, a couch, a laptop, a set of tools bought on store credit, the window is one year instead of 910 days.
Waiting can be worth thousands
If you bought the car 880 days ago and you're not in a foreclosure emergency, filing after day 910 can be the difference between paying $31,000 and paying $17,000 for the same vehicle. We check this date on every case.
What cramdown actually gets you
Two things. The principal drops to the vehicle's value, and the interest rate resets to a court-approved rate that's often well below what a subprime auto lender charged you. A 24 percent contract rate can come down substantially.
An example. You owe $28,400 on a 2018 SUV worth $14,500, bought four years ago. Cramdown means the plan pays $14,500 plus interest as a secured claim, and the remaining $13,900 becomes unsecured and is discharged with everything else at the end. When the plan finishes, you own the car free and clear with the title in hand.
The limits
You have to pay the crammed-down amount over the plan term, which means a $14,500 secured claim in a five-year plan is roughly $290 a month before interest and the trustee's fee. That's real money added to a payment that already has to cover everything else.
And you have to keep full coverage insurance the whole time. Lenders monitor this and a lapse produces a motion in short order.
“I get asked whether cramdown works on the house. It doesn't, not on a primary residence. Investment property and vacation homes are a different conversation, and a more technical one.”
Naomi Reyes-AshfordGetting the value right
Use a defensible retail or private party figure with honest mileage and honest condition. If the transmission is going or the interior is destroyed, document it with photographs and a repair estimate, because those things legitimately reduce value and lenders will argue the clean number.
Questions we get asked
Does cramdown work on a car I co-signed for someone else?
The 910-day rule turns on whether the vehicle was acquired for the debtor's personal use. A car bought for an adult child may fall outside that, which can open the door. It's fact-specific and worth asking about.
Can I cram down a motorcycle or a boat?
Those are personal property covered by the one-year rule rather than the 910-day rule, so the window is shorter and the analysis is often more favorable.
What if I refinanced the car loan last year?
Refinancing generally doesn't restart the clock, because the test looks to when you acquired the vehicle. Bring the original purchase contract.
Can I surrender the car instead?
Yes. Surrender it through the plan and the entire deficiency becomes unsecured debt that's discharged. Sometimes that's the better answer, especially on a car with mechanical problems.
What to do next
Find your purchase contract and note the exact date on it. Then pull a current payoff and a private party value. Those three numbers tell us in one sitting whether cramdown is on the table for you.