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Cram Down Rate Calculator

Bankruptcy plan must pay secured claim at Till formula rate — compute present value recovery.

Claim principal

Prime rate %

Risk adjustment %

Plan term years

Market rate for comparable %

Creditor NPV shortfall (vs market rate)

$22,434

Cram down rate

0.11%

Plan monthly payment

$8,430

How the math works

Cram down rate = prime + risk adj. Plan pays at cram down; compare NPV at market rate.

8.5%+2% = 10.5% cram down. $500k/7yr = $8,425/mo. NPV @12% = $449k. Gap to creditor = $51k.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Cram Down Rate Calculator is built to give a quick, browser-based estimate for cram down rate. Bankruptcy plan must pay secured claim at Till formula rate — compute present value recovery. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the cram down rate result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this cram down rate estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter claim principal.
Enter prime rate %.
Enter risk adjustment %.
Enter plan term years.
Enter market rate for comparison %.
Read plan payment and NPV gap.

Frequently Asked Questions

What is cram down?

In Chapter 11 and 13 bankruptcy, court can approve a plan over secured creditor's objection if plan pays present value of allowed secured claim at a court-approved interest rate. Till v. SCS Credit (2004): Supreme Court adopted 'formula rate' — prime rate plus risk adjustment (typically 1-3%). Allows debtor to extend loan term and reduce monthly payment while still satisfying creditor's secured claim.

Till formula specifics?

Base: national prime rate at confirmation. Risk adjustment: 1% (low-risk, stable company, high coverage), 2% (average), 3% (high-risk, negative trends). Cannot exceed contract rate. Terms: 5-20 year plan typical. Plan can extend maturity, reduce amortization, change rate — as long as NPV of payments ≥ allowed secured claim. Unsecured claims: no cram down; pay pro rata from available equity.

When does cram down not work?

'1111(b) election' — secured creditor elects to treat entire claim as secured (regardless of collateral value). Then plan must pay full claim amount, though at cram down rate over plan term. Creditor typically elects when collateral might appreciate or plan is abusive. Plan still confirmable but creditor extracts more value than unfair-discrimination cram down.

Typical creditor response?

Object to plan, demand market rate. Challenge collateral valuation. Negotiate consensual plan (cheaper than litigation). Challenge feasibility of plan. Make 1111(b) election if advantageous. Counsel cost: $100-500k for contested confirmation. Most secured creditors negotiate consensual plan rate at or near Till formula — litigation rarely profitable.