topic Re: Chapter 13 adding car payment into monthly payment in Bankruptcy

Chapter 13 adding car payment into monthly payment

Anonymous — Sat, 23 Nov 2019 03:54:51 GMT

I'm getting ready to start a chapter 13 soon, I filed for 7 but it will be converted. Am I able to include some of my car or student loan payment into the monthly payment to the trustee? My truck is worth 26k, but I owe 30k.

Re: Chapter 13 adding car payment into monthly payment

FireMedic1 — Sat, 23 Nov 2019 10:18:15 GMT

In Chapter 13 bankruptcy, you keep your property and pay back some debts in full and others in part through a three or five year repayment plan. If you want to keep your car in Chapter 13 bankruptcy, you must keep current on your car payments. If you are behind on your payments when you file, you can pay off the arrearage through your Chapter 13 repayment plan. Chapter 13 also provides a means to reduce your car loan in certain circumstances specifically, if your car is worth less than the amount of your loan. Your lawyer will know how to handle it. Good Luck!

Student loans are a whole different ball game.

Re: Chapter 13 adding car payment into monthly payment

despritfreya — Sat, 23 Nov 2019 12:59:49 GMT

@Anonymous wrote:
I'm getting ready to start a chapter 13 soon, I filed for 7 but it will be converted. Am I able to include some of my car or student loan payment into the monthly payment to the trustee? My truck is worth 26k, but I owe 30k.

Assuming you want to keep the vehicle, unless it is under a true lease, it will most likely be paid through the Trustee. If you have not had the purchase money loan for more than 910 days prior to the filing date of your case, your Plan will provide for the total balance due. The Plan may or may not reduce the contract rate of interest to what is called the Till rate. Discuss this with your atty. Please note that there are very few jurisdictions that will allow one to pay a secured vehicle outside the Plan. Why? Because, if it is not paid through the Trustee, the Trustee does not make a few bucks. My understanding is that Florida requires all debt secured by personal property to be paid through the Plan. Again, discuss this with an attny.

The student loan is nothing more than a general unsecured debt - just like a credit card. The only difference is that, in general, it is not discharged. The lender will share in whatever pie is available to the general unsecured creditors. Since the loan will survive the bk you will want to make sure the lender files a TIMELY proof of claim. Please note that some jurisdictions do allow direct payments outside the Plan due to the nature of the loan but those jurisdictions are few. I do not know if one of them is Florida.

You will work with your attny to formulate the Plan. The first payment under the Plan will be due 30 days after you file/convert.

Des.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sat, 23 Nov 2019 13:23:37 GMT

I have another question, if I want to sell my house during a chapter 13 and the house is in my wife and my name...can my wife pocket some of the proceeds? I have 200k equity in my home. Can she pocket 60k and then the rest goes into another home?

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sat, 23 Nov 2019 13:25:45 GMT

Thank you.

Re: Chapter 13 adding car payment into monthly payment

Lawns1 — Sat, 23 Nov 2019 13:51:59 GMT

We have a chapter 13 100% repayment. We pay both car leases and our mortgage outside the repayment. The cars were current and the mortgage was 4 months behind at the time of filing. They put the 4 months into the chapter 13 and the normal payment outside. The student loans were inside the payment but we had to sign a form that once the 13 was completed we would get a bill from Nelnet regarding interest that accrued through the 13. He estimated it would be $500-$600.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sat, 23 Nov 2019 16:38:59 GMT

Thank you

Re: Chapter 13 adding car payment into monthly payment

sports1965 — Sat, 23 Nov 2019 18:09:53 GMT

You can pay your car outside of your BK13 plan in Florida!

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sat, 23 Nov 2019 18:42:48 GMT

Can I do a cramdown if I owe 30k and it's worth 26k. I'm trying to lower the payment. I was converted to a 13 from a 7 and the sad thing is budget is still super tight. Not sure how they figured I have all these extra funds. My lawyer said I should get a 7 and the trustee dug in so deep and was able to get it converted to a 13..I have a family of 6, and they pinched every penny out of me. So much for a fresh reset.

Re: Chapter 13 adding car payment into monthly payment

despritfreya — Sat, 23 Nov 2019 21:10:30 GMT

@Anonymous wrote:
Can I do a cramdown if I owe 30k and it's worth 26k. I'm trying to lower the payment.

Not if this is a purchase money loan AND you purchased the vehicle within 910 days (within just over 2.5 years) prior to filing the bk.

When did you purchase the vehicle?

Was there a trade-in?

If there was a trade-in did you owe money on the trade-in?

If you owed money on the trade-in was the balance owed added to the purchase price of the new vehicle?

What is your interest rate?

Des.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sun, 24 Nov 2019 01:11:06 GMT

I bought the truck no money down May of 2016. I financed thru a credit union with a 6.99% rate. My payment is 601 a month..would love to get it down somewhat. It's an 84 month term loan.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sun, 24 Nov 2019 01:28:30 GMT

Also, we drafted a affirmation and my cu was willing to redo the terms and get my payment down to 480. That was when I was hopeful I was getting a chapter 7, but now with a 13 does that still apply? If I remember correctly you dont do affirmations in a chapter 13. ????

Re: Chapter 13 adding car payment into monthly payment

despritfreya — Sun, 24 Nov 2019 13:09:26 GMT

@Anonymous wrote:
I bought the truck no money down May of 2016. I financed thru a credit union with a 6.99% rate. My payment is 601 a month..would love to get it down somewhat. It's an 84 month term loan. Also, we drafted a affirmation and my cu was willing to redo the terms and get my payment down to 480. That was when I was hopeful I was getting a chapter 7, but now with a 13 does that still apply? If I remember correctly you dont do affirmations in a chapter 13. ????

The CU's willingness to drop the payment through a Reaffirmation Agreement has no impact on the Chapter 13. You are correct. One does not enter into a Reaffirmation Agreement in the context of a Chapter 13.

Now. . . the cramdown is another issue. You said you financed the vehicle in May, 2016. What is your bankruptcy filing date? Is it more than 910 days after the date of the loan? If "yes" then you can do a cramdown however, the value of the vehicle is not "trade-in". Pursuant to 11 USC 506(a)(2) the value is:

"the replacement value of such property as of the date of the filing of the petition without deduction for costs of sale or marketing. With respect to property acquired for personal, family, or household purposes, replacement value shall mean the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined."

So, assuming you are beyond the 910 rule, how did you arrive at the value? The interest rate could be close to the Till rate in your district. Please note that, in my experience, Credit Unions are less likely to object to the value you placed on the collateral than say. . . Ford Motor Credit.

Des.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sun, 24 Nov 2019 13:44:52 GMT

I looked up the retail value on nada and found it to be 26k. My filing date is sept this year, so it's been over 3 years since I bought it.

Re: Chapter 13 adding car payment into monthly payment

despritfreya — Sun, 24 Nov 2019 16:33:18 GMT

@Anonymous wrote:
I looked up the retail value on nada and found it to be 26k. My filing date is sept this year, so it's been over 3 years since I bought it.

Then a cramdown is in the cards. Maybe set the interest rate at 5.5%? Your attny will know what "flies" in your district.

Des.

Re: Chapter 13 adding car payment into monthly payment

Anonymous — Sun, 24 Nov 2019 16:40:19 GMT

Thank you so much. I just feel my attorney is not feeding me enough info. I have to find all this stuff online. I really appreciate your feedback.