910 day car rule

[lsutton1974]

Does anyone know anything about this? I meet with an attorney on Tuesday, very excited to get this started. We are a family of 6 with one on the way( I know I must be insane) and he told me that with a family that large are payment should be minimal. The problem is we have two vehicles we plan to keep. We still owe about $25,000 total on these and we have only had them around 500 days. Does anyone know how that will affect my payment plan???

[keepmine]

If you own a car that is financed and had it for over 910 days, the court will allow you to execute a cramdown. In other words, the car will not be valued at the amount left on the note but, at fair mkt value.
Your payment plan with a family that large will likely be paying secured creditors at 100% and a minimal payment to unsecured creditors.
Any reason you are filing a 13 as opposed to a 7?

[lsutton1974]

We filed Chapter 7 6 years ago and we are over the median income. I know about the cram down but we have had are vehciles for less then 910 days. So will they include these in the bankruptcy for what we owe? Or will he have to pay them seperately?

[Minnymouth]

Keepmine ---- Question?????

Have I missed something here?I understood that the "cram down" offers STOPPED under the new laws......?????

Anybody else have any input on this????

[lrprn]

Keepmine ---- Question?????

Have I missed something here?I understood that the "cram down" offers STOPPED under the new laws......?????

Anybody else have any input on this????

Our proposed Ch 13 plan includes three cars that will be paid inside the plan - two we've had longer than 910 days and one we've had less. The two greater-than-910-day car payments are for the remaining loan value of both cars spread out over our 57 payments. According to Kelley's Blue Book and Edmunds.com, both of these cars are worth more than their current loan value so cramdown wasn't necessary. The car less-than-910-days is upside down - the car is worth several thousand $ less than the current loan value - so we have to pay the full value of the loan - our lawyer told us no cramdown is allowed on a car we've owned less than 910 days under the new law. Note: we are not paying interest on any of the three cars.

Will see what happens to this arrangement when we meet with our trustee at the 341 meeting next week. Am hoping we will be allowed to keep the third car (three adult drivers in the household each employed and needing individual transportation) - we'll see.

[SinkingFast]

Keepmine ---- Question?????

Have I missed something here?I understood that the "cram down" offers STOPPED under the new laws......?????

Anybody else have any input on this????

Yep. Lrprn is right about the rule.

Same thing, sorta with homes too, Minny. The 125K equity cap does not apply if you've owned your house long enough prior to filing and your State allowed a bigger exemption under the Old Law. Long term property owners in Florida and Texas who file BK are grandfathered in under their State's old Unlimited Homestead Exemptions.

For regular folk like us, who are just learning about all this, long time property owners really need to check on the rules. It can make a HUGE difference in your BK. What you're allowed to claim in Homestead Exemption and if you can cram down your car loan.

[lsutton1974]

So what you are saying is they can be included in the Bankruptcy, which is the impression I got from the attorney over the phone, but I have to pay what I owe on them instead of market value? As long as they can be included in the BK that is fine with me. We probably owe close to market value anyway.

[SinkingFast]

Either way you can include loans in BK. But the Law changed on how autos and homestead exemptions worked.

Old Law, you could cram down an auto loan to actual FMV regardless of when you purchased the car. You could run out, buy a new car, file BK a year later, and the Lender would get hit with the depreciation. New Law, you have to own a car at least 910 days in order to cram down the note to FMV. If you have not owned the car 910 days, you are required to pay the full amount due and payable on the loan at the time of your BK.

Old Law, some States had unlimited Homestead Exemptions. New Law is $125K max. But if you've owned your home in excess of 1215 days, you can grandfather in the old status of you State's exemption. Florida and Texas used to allow for unlimited Homestead exemptions. You could file BK and keep your multi million dollar estate no sweat. Now the limit is subject to a $125K in equity cap.

Here's a link about the new Homestead exemption rule:

http://www.assetprotectionbook.com/h...exemptions.htm

[keepmine]

Sorry for the delay Minny. Been busy and didn't have a chance to answer but looks like everybody beat me too the punch anyway.
Anybody filing bk really needs to get very familar with the laws. A year before I filed {old law} I was reading the code cover to cover. I'd encourage all potential filers to do the same.