Do I have to include my car loan

[arlington]

I am about to file a chapter 13 and I want to know if I have to include the loan. I am current on the payments and don't want to unless I have to.

[MOMof3]

We had to include ours because it would have been paid off during the first year of the plan increasing our disposable income (and therefore our trustee payment). I'm not sure of the exact "rules" around this or if there is a way to get around it.

[arlington]

Momof3...so let me make sure I am understanding you...being that your car would have been paid off in the 1st year of your plan would that mean that it would have affected your monthly payment to your trustee? Also..will you receive your title once the car is paid off or do you have to wait until you are done with the program in its entirety?

[MOMof3]

The car is included in the plan and the trustee is paying $250 per month (my payment "outside" the plan was $405), so it will take a bit more time to pay it off than had I done it myself. They also didn't pay anything on it the first couple months in the plan--I'm not sure why, I'm thinking because there were lawyer fees and other things getting paid that had priority, but it shows that it should be paid off in 14 months. I was told that we would get the title from the lender when it was paid in full.

I'm not sure if I'm answering your question right! If we didn't include the car in the plan, then that would mean that once the car was paid (which would have been 6 months after filing), we would have an extra $400 per month? They would then want the payments to go up by that amount (which we couldn't afford)

[arlington]

Thanks momof3. I need to clarify with my attorney about the title part. I was told (and have read) that you only get the title back when you have completed the Chapter 13 plan so even if I decided to put my car in the plan and paid if off in three years (with me having 2 years left in the 13 plan) I would have to wait those 2 years to receive my title back.

[MOMof3]

I guess I'm not sure about the title part then. If it's paid in full, then you should own it and have the title in your name? I'm not sure why the trustee would want to hang on to it. Maybe someone else here will know!

[rrockinggramma]

Generally if you are current on the car paymens, it doesn't have to be included. it can be but doesn't HAVE to be, usually. In our case, we were behind so we included the car. The good side of it was that the company had to only claim principal owed and it saved us big bucks in interest charges. The down side ofcourse is that there is no history of on time payments. But if you aren't having any problems with the car payment, I think it would be up to you and your lawyer as to whether or not it is to your advantage to include it in your plan.

[rrockinggramma]

In addition, our car was paid off while we were in our plan and the finance company sent us the title and release of lein statement as soon as it was paid off. But I was on the phone with them all the time making sure the pay off balance (again principal only) was paid in full by the trustee. I think I did end up sending them like 15.00 to finish it off and get the title released.

[arkienurse]

Thanks momof3. I need to clarify with my attorney about the title part. I was told (and have read) that you only get the title back when you have completed the Chapter 13 plan so even if I decided to put my car in the plan and paid if off in three years (with me having 2 years left in the 13 plan) I would have to wait those 2 years to receive my title back.

Our truck was paid in full through the plan. I called the bank the next month, and they sent me the title immediately.
Our van is paid fully on the secured portion, but the unsecured portion still has a balance. We have not gotten the title for it yet.