If you are struggling with debt by any means, it is likely you are considering the very real possibility of filing for some form of bankruptcy in order to address your current financial state. In the event that you own investment or rental property of some sort, here are a few things to consider in order to cramdown your payments. First, we must acknowledge the obvious—what does "cramdown" mean? Cramdown in essence is used to discuss the idea of reducing your principle payment that you owe on your current mortgage. If you are concerned with lowering this principle because you fear that your debt will become too great, Chapter 13 bankruptcy just may be the option that was made for you.

Mortgage cramdown is used in order to help lower your principal payments and in some cases your interests rates as well. When using this method, there are specific properties that allow this process to be used; and if you are an investment property owner, you are looking in the right place. What then, is considered to be investment property? Basically, any property that you own that is not your current place of residence is considered to be an investment. Due to the complexity of bankruptcy, it is imperative that you contact a local bankruptcy attorney in your area immediately before you start anything. By hiring a lawyer who is skilled in this specific area, you will be able to have a more thorough understanding of what you are agreeing to, and have someone who can guide you through the many legal documents that are necessary for the process.

In most cases, people will purchase extra property as a place to invest their money; hoping to at some point accumulate extra value in the property over time. Sadly, we can never really trust the real estate market and because of that we never know whether the property value will increase or decrease in value. When it comes to the mortgage, if your property ends up depreciating in value and you have not had the opportunity to pay off a lot of the mortgage, this could be potentially bad for you as an investor. In the event that you owe more on your mortgage than your property is worth your property is called "upside down."

Benefits of choosing to use chapter 13 bankruptcy for cramdown your mortgage include the possibility of having a reduced interest rate on the property. By filing for bankruptcy, the court will be required to determine the new interest rates you will need to pay in order to pay for your debt in a set amount of time, and in many cases this just may be lower than your original plan. Another benefit includes there being no liability for paying the deficiency balance. If your property is later on foreclosed by the mortgage company, because your debt is considered to be unsecured under bankruptcy, you will not be responsible to pay for that deficiency balance on the mortgage.

It is important to realize however, that Chapter 13 bankruptcy last between 3 to 5 years and the court may require you to pay off that mortgage balance during that time frame. Essentially, this means that you will need to be able to have enough money by the end of this period to pay off the set amount of money. Contact a bankruptcy attorney in your area immediately in order to have the legal guidance that is required during this process. You don't want to do this alone, and with the help of a lawyer, you won't have to. Find one in your area today!