Any good arguments to fight a "RV is not a reasonable and necessary expense" obj??

[debtinohio]

So, I'm fighting an objection by our trustee that our leined RV is not a necessary and reasonable expense.

Anyone have experience fighting this? My lawyer is writing the response and fully expects to have to go in front of the judge with it. Even though there's a high-chance I'll lose, I figure WTH it's either fight it or $200 more goes to unsecured, it's not like I'd get to keep that amount.

We're at a 12% payback proposal, the RV loan is < $10K. Having that amount go to unsecureds would provide an additional 3-4% for them.

We use the trailer for family entertainment, I submitted 0 for recreation. We are over on the house/car allotments but under everywhere else.

Anyone have any thoughts? Perhaps someone who was able to keep a motorcyle/boat/etc.

Thanks in advance.

[TexasEx]

yeah, good luck with that one (unfortunately). I remembered reading one of your earlier posts where you mentioned that you were planning to keep the RV and thought that it sounded way too easy. I had to surrender our travel trailer and although it was hard, I figured it was not worth it anyways considering that it was upside down and I was dumping so much other debt.

Not sure what to tell you here. I hear what you are saying and it makes sense regarding the entertainment expenses, however I don't think any trustee would agree with you considering their job is to represent the unsecured creditors' interest. We ended up sucking it up, surrendering the travel trailer and now we are saving to buy a used one in a couple of years (yeah, I was able to pad our budget enough to sock money away, plus I get to keep bonuses and tax returns). I know what you want to hear, but do think hard and ask yourself if it makes sense to fight it (considering RVs loose so much of their value, how much you can use it in these parts of the country and the other expenses associated with storage, campgrounds, repairs, etc.).

In our case we figured we did not want to bring attention to ourselves in front of the trustee and have him question our budget too much (which ended up being extremely generous). Good luck and do keep us posted how things turn out.

[debtinohio]

It was okay for a while, then the trustee objected. It's actually our final hurdle so I guess we'll see. We'll file a response and then take it to the judge.

I figured at this point its *free* to keep it, otherwise the payment is the same and the rest goes to unsecureds anyway.

I thought about just offering the bank some $$ after I lose, hoping they'd prefer to sell it to me. Who knows. I would also like to have a different floor plan anyway, this one doesn't work that well for our family so just replacing it would be fine with me.

We get to keep bonus & tax returns also - - this is significant to us too.

[BuckeyeGuy13]

Ohio, did you get the step-payment situation figured out?

[debtinohio]

Ohio, did you get the step-payment situation figured out?

We did - it goes down about $470 when the lease is up in a few months. I can't believe how long it took to work that out. I couldn't keep the whole $600 payment, but came close enough.

I owe a lot to you, thanks for the help!

[BuckeyeGuy13]

Great to hear that! Good luck with your confirmation!

[justbroke]

Sorry, but trying to keep an RV at the expense of the unsecured creditors is, by all definitions, bad faith. If you go before a Judge, s/he isn't going to let you keep it. The strange part is that the Bankryuptcy Code technically allows your payment of the loan, but it's considered bad faith when you keep an asset that is "not necessary for the effective reorganization of the debtor" to the detriment of the unsecured creditors.

Of course, you could offer $10K over the term of your Plan in addition to your current DMI... to the unsecured creditors.

It's really up to you... surrender or pay $167/month more.

[mkstlowe]

We have RV was told he will try but if they don't approve I can keep put to expect my payment to go up the $200 dollars. So that's how we are playing it on our end. We shooting for the higher amount. My lawyer didn't say we would have to surrender but he did say our payment would go up. We are current on the RV and was told to continue to make thep payments.

[justbroke]

Yes, it's a choice... surrender or pay.

[tigergem]

I'm not sure, but unless you are living in it? (Maybe.) If I was going to argue a thing like that, I would look to the IRS guidelines that qualify an RV as a "home" for the purposes of interest tax deductions. I mean, since that is allowed in that context.

[SMinGA]

If you lose the argument, would it be possible to amend your plan to include $75-100/mo for entertainment/recreation? (Or whatever amount would be appropriate in your district for your family size?)

[debtinohio]

Sorry, but trying to keep an RV at the expense of the unsecured creditors is, by all definitions, bad faith. If you go before a Judge, s/he isn't going to let you keep it. The strange part is that the Bankryuptcy Code technically allows your payment of the loan, but it's considered bad faith when you keep an asset that is "not necessary for the effective reorganization of the debtor" to the detriment of the unsecured creditors.

Of course, you could offer $10K over the term of your Plan in addition to your current DMI... to the unsecured creditors.

It's really up to you... surrender or pay $167/month more.

I thought about this but would rather buy a new used one or try to buy it from the bank later (if possible). It's really not worth the $10K, it should have been crammed down to a realistic $6000 value, but my lawyer wanted to play it safe (er) lol.

[debtinohio]

If you lose the argument, would it be possible to amend your plan to include $75-100/mo for entertainment/recreation? (Or whatever amount would be appropriate in your district for your family size?)

I did tell my attorney we have to modify the schedules if we lose, we made some sacrifices on expenses in order to keep it. Our house taxes alone already went up $75/month. So we need to fix that anyway.

My wife and I are already prepared to lose it, we're just looking for a way to let the kids know.

[debtinohio]

I'm not sure, but unless you are living in it? (Maybe.) If I was going to argue a thing like that, I would look to the IRS guidelines that qualify an RV as a "home" for the purposes of interest tax deductions. I mean, since that is allowed in that context.

Great idea, there's a lot of debate about this issue and their qualification as a 2nd home. I have not done enough research to determine this yet.

[tigergem]

The nice thing about an RV, though, not only could it qualify for homestead exemption, but you can cram the loan down in a Chapter 13, because it qualifies a vehicle loan, even though you can deduct the interest for income tax purposes. But, like I said, I think you would have to be living in it to pull all of that off. Now that makes me wonder. With all these house foreclosures going on, the RV industry says sales are way up. I wonder if that is exactly what a lot people are doing?