Nolo's Plain-English Law Dictionary

Cramdown

In Chapter 13 bankruptcy, a reduction in the amount of a secured debt the debtor must repay to the replacement value of the collateral securing the debt. For example, if a debtor owes $5,000 on a car that's worth only $3,500, a cramdown would reduce the amount of the debt that had to be repaid in Chapter 13 to $3,500.

Learn how a cramdown works in our section on Reducing Loans and Non-Residential Mortgages in Chapter 13 Bankruptcy.

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