In addition to thousands of successful bankruptcy filings for his clients over the past 20 years, Cincinnati Bankruptcy Attorney Greg Wetherall has been involved in significant cases shaping bankruptcy law in Ohio.
A major benefit of Chapter 13 is the ability to Cramdown loans encumbering property. A "Cramdown" can occur when the property, encumbered by a loan, is worth less than the amount owed on the loan encumbering it. In a Cramdown, the Debtors are allowed to pay just the value of the property rather than the full amount owed on the loan, with the balance of the loan going away without ever being paid.
Below are a series of cases, spanning a six year period, in which Greg changed the law as it pertains to the Cramdown of Mobile Home Loans.
The Bankruptcy Code provides that a loan may NOT be subjected to a Cramdown if it is secured only by an interest in “real property” that is the Debtor’s “principal residence.” (See 11 U.S.C. § 1322(b)(2)). In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) took effect which included a provision expanding the definition of a Debtor’s “principal residence” to include mobile homes. (See 11 U.S.C. § 101(13A)).…
In this case, Greg’s Clients owned a Mobile Home worth $20,000.00 while owing over $100,000.00 on their Mobile Home Loan. Greg filed a Chapter 13 Plan which proposed paying only $20,000.00 on the secured portion of the the Mobile Home Loan and discharging the balance of the loan. This means, at the end of the Clients’ Plan, the other $80,000.00 would be discharged and the Clients never had to pay it.
Prior to the decision in this appeal to the United States District Court for the Sou…
After losing in the United States District Court, the bank, which owned the Mobile Home Loan that was subjected to Cramdown, appealed the decision of the District Court to the United States Court of Appeals for the Sixth Circuit. The Sixth Circuit affirmed the decision of the District Court and held that a Mobile Home Loan could be subjected to a Cramdown unless: (1) the Title to the Mobile Home had been surrendered to the Clerk of Court; (2) the Mobile Home was affixed to a permanent foundation…
