Is it possible to reduce the amount of my secured debt in Chapter 13 Bankruptcy?

Yes, it is possible to reduce the amount of your secured debt in Chapter 13 Bankruptcy in Washington. Chapter 13 Bankruptcy, or the “wage earner’s plan,” is a type of bankruptcy that allows debtors to reorganize their finances and pay off their creditors over a period of time, typically three to five years. During this time, the debtor’s debt is restructured, allowing them to make a single payment to the bankruptcy trustee that is generally lower than their total debt. One of the options available through Chapter 13 Bankruptcy is a secured debt reduction, or “cramdown.” If a secured debt is greater than the value of the collateral, such as in the case of a car loan with a car worth less than what is owed, Chapter 13 Bankruptcy allows the debtor to reduce the amount owed on that debt to the value of the collateral. This means that the debtor is only responsible for paying the amount owed on the collateral, which is usually less than the original amount of the loan. In addition to reducing the amount of the secured debt, Chapter 13 Bankruptcy also allows debtors to make payments on both secured and unsecured debts over a period of time, often at lower interest rates than they had prior to filing. This makes it easier for debtors to manage their payments and pay off their debts in a manageable manner.

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Is it possible to reduce the amount of my secured debt in Chapter 13 Bankruptcy?

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