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$585 Car Payment.....Can I keep my car?

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  • $585 Car Payment.....Can I keep my car?

    I am wondering if there are people out there who filed for Ch7 and kept a car with a high monthly payment. I have a $585/month car payment and I'm hoping I can keep my car. I am in the Eastern Michigan District and the regular allowance is only $471. What do people with short term loans like 3 years do? My attorney has suggested filing for Ch13 so I could make a lower payment since the balance would be divided by 60 months. He has warned me that the trusteee may object to such a high payment and make me surreder the car. I am hoping that I can stay in a Ch7 so I can move on with my life and start rebuilding. I bought my car almost 2 years ago, before I thought I'd be considering bankruptcy.

    How would someone be able to get another car to replace the surrendered one when their credit score is low?

    Here is a little background information in case anyone is interested:
    The main reason I am filing is my ex husband stuck me with a $425K mortgage in 2004. He warned me that he was going to file for bankruptcy after the divorce and suggested I get a mortgage on my own or the house would be tied up in his bankruptcy filing. I thought there was a good amount of equity in the house so I got a mortgage. I have borrowed for 3 years to help me pay for the house while I tried to sell it. The Michigan real estate market dried up and that house is now in foreclosure. I have been living in a less expensive house I bought in 2005, when I thought the old house would sell. I want to keep my new house and car. My income is over median but my mortgage and car payments are high enough that I pass the means test. I have been told that the trustee could object to filers keeping a nice house and car in a Ch7. My mortgage payment is $1250/month. I have an option ARM so interest only would be $1877.

    I would appreciate any insight on filing Ch7 with high secured debt payments.

  • #2
    Our truck payment is $600 a month. We have 21 months left on the loan at 1.9% interest. It was originally a 60 month loan. We'd like to keep it, but if they tell us we have to surrender, I'll gladly do it just to get out of this horrible mess. I'll be curious to see what the answer is on this. We haven't decided to file yet, I'm reading a bunch of books on debt to see what the right solution will be. I wish I would have refinanced the truck to a lower payment, but now that would probably be impossible. Redemption won't be an option for us if we file because US Bank is one of our creditors!

    Comment


    • #3
      Originally posted by MI_Debtor View Post
      How would someone be able to get another car to replace the surrendered one when their credit score is low?
      What some Ch 7 filers do is stop paying all their non-secured credit cards and loans, then save that money up before filing. They then surrender the upside-down car and buy a 'beater' for cash and drive it while their case winds through the courts. Once their case is discharged and closed, after six months or so with ontime payments for everything, it's possible to buy a good, used car with somewhat reasonable interest rates.

      My income is over median but my mortgage and car payments are high enough that I pass the means test. I have been told that the trustee could object to filers keeping a nice house and car in a Ch7. My mortgage payment is $1250/month. I have an option ARM so interest only would be $1877.
      Your lawyer knows much more about how the trustees in your bankruptcy district typically treat high-income filers with high secured debt payments than we do. Sounds like he/she does have some concerns about your chances of making it in a Ch 7.

      Eventually you will have to decide to either throw the dice on Ch 7 and hope for the best or go the safer route and file Ch 13. It's a tough choice
      I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

      06/01/06 - Filed Ch 13
      06/28/06 - 341 Meeting
      07/18/06 - Confirmation Hearing - not confirmed, 3 objections
      10/05/06 - Hearing to resolve 2 trustee objections
      01/24/07 - Judge dismisses mortgage company objection
      09/27/07 - Confirmed at last!
      06/10/11 - Trustee confirms all payments made
      08/10/11 - DISCHARGED !

      10/02/11 - CASE CLOSED
      Countdown: 60 months paid, 0 months to go

      Comment


      • #4
        My car payment is $795 and I'm keeping my car.....

        Comment


        • #5
          had a $600 payment and had to convert to a 13 to keep it...ended up surrendering it anyway and am stuck in a 13 because of it. YMMV by district.
          Filed CH7 - 10/13/05;
          341 Meetings: 11/28/05, 3/20/06, 12/4/07 (3d time's a charm!)
          Converted: 2/15/06 (to CH13), 10/15/07 (Back to CH7)
          DISCHARGED: 2/15/08

          Comment


          • #6
            my goodness coma, you have to convert because you wanted to keep your car??? Man, if they told me I had to convert in order to keep my car, the car is gone, puff LOL. In my case chapter 13 is not an option it is either chapter 7 or nothing at all. However, if I had a house to save then I would consider chpt 13 but heck, we have nothing.
            Success is reachable, stretch out your arm and grab it.

            Comment


            • #7
              Originally posted by freshstart06 View Post
              my goodness coma, you have to convert because you wanted to keep your car??? Man, if they told me I had to convert in order to keep my car, the car is gone, puff LOL. In my case chapter 13 is not an option it is either chapter 7 or nothing at all. However, if I had a house to save then I would consider chpt 13 but heck, we have nothing.
              Yup...the trustee said if we wanted to, we had to convert, which we stupidly did. We wanted to hand onto it because it was only two years old, we had a decent rate, and couldn't be without a car. The finance company filed for relief from stay, even though we were not behind at the time, and it was granted, so we were afraid of losing it and being without a car until discharge. That's why we didn't just give it up at the onset. We don't have anything, either, and took a pay cut recently. So we're realy worse off, though we're struggling to make the payments, so we can just get out of this mess, since we can't convert back. Even if we modified, we're already only paying 10k on 76k and a lower payment doesn't help when you are negaive in the first place...anyway, I digress...sorry for the hijack...I think I needed to vent...
              Filed CH7 - 10/13/05;
              341 Meetings: 11/28/05, 3/20/06, 12/4/07 (3d time's a charm!)
              Converted: 2/15/06 (to CH13), 10/15/07 (Back to CH7)
              DISCHARGED: 2/15/08

              Comment


              • #8
                Sorry for the hijack as well, I read your story and i wondered what happened. I looked like you were no assets then "boom" you had to convert to cht 13

                So there is not way you can convert back at all?? I would look into that. Well the good thing you only have only two more years to go opposed to Four more years.

                Believe me if that comes up with our case the van is gone, Heck, I will leave it at the court house. It is only two months after the 341 meeting and some places offer car financing after the meeting .
                Success is reachable, stretch out your arm and grab it.

                Comment


                • #9
                  $500 payment. $600 payment. $700 payment. On auto.
                  Pretty deep payment there....

                  BK is not about maintaining your existing life style. BK is restructuring. People say they are filing but they don't want to give up the car. They don't want to give up the house. But the question is, can you realisticlly afford to keep the car /the house? Is spending that much on car payment a wise financial decision?

                  Comment


                  • #10
                    Originally posted by Spartan View Post
                    $500 payment. $600 payment. $700 payment. On auto.
                    Pretty deep payment there....

                    BK is not about maintaining your existing life style. BK is restructuring. People say they are filing but they don't want to give up the car. They don't want to give up the house. But the question is, can you realisticlly afford to keep the car /the house? Is spending that much on car payment a wise financial decision?
                    Yes, I can afford to keep my car with a payment of $795....

                    Comment


                    • #11
                      Originally posted by freshstart06 View Post
                      my goodness coma, you have to convert because you wanted to keep your car??? Man, if they told me I had to convert in order to keep my car, the car is gone, puff LOL. In my case chapter 13 is not an option it is either chapter 7 or nothing at all. However, if I had a house to save then I would consider chpt 13 but heck, we have nothing.
                      Why Chapter 7 or nothing? At this point, I'll take either!

                      Comment


                      • #12
                        I've always paid more then 600 for a payment. I'm used to it. I get a new car every 3 years. If I can't keep my car, forget it!
                        I'll get a second job!

                        Originally posted by Spartan View Post
                        $500 payment. $600 payment. $700 payment. On auto.
                        Pretty deep payment there....

                        BK is not about maintaining your existing life style. BK is restructuring. People say they are filing but they don't want to give up the car. They don't want to give up the house. But the question is, can you realisticlly afford to keep the car /the house? Is spending that much on car payment a wise financial decision?

                        Comment


                        • #13
                          Originally posted by Spartan View Post
                          $500 payment. $600 payment. $700 payment. On auto.
                          Pretty deep payment there....

                          BK is not about maintaining your existing life style. BK is restructuring. People say they are filing but they don't want to give up the car. They don't want to give up the house. But the question is, can you realisticlly afford to keep the car /the house? Is spending that much on car payment a wise financial decision?
                          We lost more than half of our income after a move we were required to make. We could've kept it, paying it and out bk payment (car was outside of the plan), if we did not have to move. We realized (too late, of course) that we can't afford it...
                          Filed CH7 - 10/13/05;
                          341 Meetings: 11/28/05, 3/20/06, 12/4/07 (3d time's a charm!)
                          Converted: 2/15/06 (to CH13), 10/15/07 (Back to CH7)
                          DISCHARGED: 2/15/08

                          Comment


                          • #14
                            Originally posted by Logan View Post
                            My car payment is $795 and I'm keeping my car.....
                            One hell of car you have there! Is it short term loan or you have a high interest rate?

                            My highest payment on a car was 500.00 and no car is worth over 250.00 a month in payment IMHO.

                            Comment


                            • #15
                              Originally posted by Blue_Ray View Post
                              One hell of car you have there! Is it short term loan or you have a high interest rate?

                              My highest payment on a car was 500.00 and no car is worth over 250.00 a month in payment IMHO.

                              My Infiniti was 660 and I loved that car. Someone hit me and totaled it. I'd still have it if it weren't for that...
                              If I could keep one thing in life, it's my car...
                              I live in it practically and that's one thing that I'm going to blow my money on...

                              Comment

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