Answer to Question 1
Under Chapter 13, a secured loan may be restructured to reflect the current market value of the property. Cramdown is a bankruptcy power that many use in connection with a car loan where the collateral has depreciated faster than the outstanding loan balance. Under Chapter 13, a secured loan may be restructured to reflect the current market value of the property. The debtor, in his or her repayment plan proposal, will outline how he or she intends to repay the value of the vehicle over the three- to five-year Chapter 13 plan. The bankruptcy court will determine a fair interest rate to apply to the remainder of the cramdown loan. The remainder of the loan or the unsecured portion of the loan will be treated in the same manner as the debtor's other debts.
Answer to Question 2
D