Payment questions...

[AndyChristie]

We met with an attorney the other day, and the payment that he quoted was quite a bit higher than i expected.

Heres the scoop:
Keeping boat 35k balance, 350 payment ( neg equity, trustee should let us keep it )
Keeping truck 37k balance, 730 payment ( only vehicle )
Car repo'd, neg balance is about 15k
have 12k in CC debt
3k to IRS

He quoted our payment at 1300 a month

We did a sample DMI worksheet, and it came out that we had about $600 a month after normal living expenses. This amount did not include the boat or truck payment.

How'd he come to this number? I realize the payment is only a couple hundred more than the truck and boat payment... but i thought this was to help us reduce our debt, not add some.

He said we can cram down the boat, will that affect our payment amount?

He said craming down the truck would probably not work because its with a credit union. Is that right, or does he just not want to do the extra work to get it crammed down?

Sorry for all the q's, wife and i just dont know what to do. $1300 a month would hardly leave us food and gas money.

[StartingOver08]

Have you retained this attorney yet?
Have you interviewed other attorney's yet?
Did you do your own budget including everything?
Is the truck loan more than 910 days old (for the cram down)?

You might have to think about giving up the boat. If you can't afford the payment you have to consider everything.

[AndyChristie]

Have you retained this attorney yet?

No, not yet, of the two this guy was the nicest

Have you interviewed other attorney's yet?

Yes, phillips and assoc. was like a car dealer, "if we can help you would you hire us today?" what??

Did you do your own budget including everything?

Yes, but he hardly looked at it when we showed him.

Is the truck loan more than 910 days old (for the cram down)?

Yes

You might have to think about giving up the boat. If you can't afford the payment you have to consider everything.

Agreed, it is being considered. We worked really hard to get it and keep it over the last year as it means allot to my wife and i, but we know if it comes down to it, its going.

[StartingOver08]

I don't know why there would be a problem with a cram down for your truck if its more than 910 days since the loan. That is a huge truck pmt.

I actually reaffirmed a car loan with my CU and they were very, very negotiable - we changed everything, rate, amount, payment etc. We removed all cross-collateralization right in the agreement.

BTW, I agree with you on the 'car dealer' type approach with the attorney - yuck.
But you do not want a nice attorney either - you want a pit bull, IMO.

[justbroke]

I don't see where the problem in math is, but I do see issues. There are just too many factors and we don't have near enough information to comment on the lawyer's projected payment.

Don't shop by "payment" amount, like people shop for cars. Shop by a competent lawyer who has a good reputation in the District and does this as his primary practice area (unless it's a large firm, but then again, should be within their bankruptcy practice area).

Since you have $27K of CC debt and deficiency balances (from re-possessed car), you may have to pay that back, Keeping the boat is affecting your payment too. It's not a car, so you'd have to pay a minimum of the value of the boat towards the $27K in unsecured debt I see, just by looking. If the boat is worth $27K, then youy'd have to pay into a 100% plan or $27K to the unsecured creditors. That means $450/month in a 60-month plan or $1,038 in a 36-month plan... minimum. Then you'd have to add in the payments for the truck and boat on top of that.

Are you over/under median?

Note: the reason I think the boat value would have to be paid to the unsecured creditors is this. Chapter 13s are much different than Chapter 7s when it comes to equity. Chapter 13s have to account for a sort of net present value (NPV) of things that you're keeping. (I use NPV but it's not really NPV, but it does get my point across.)

Had you not kept the boat, you could contribute nearly 100% to the unsecured creditors. But, since this is a secured asset, you get the benefit of it's value at the end of the plan. That is, an asset worth, say, $27K in month 60. Why do the unsecured creditors get to suffer while you enjoy that money? They don't, and that's why I think your payment may be even higher than what your lawyer suggest.

Of course, I'm no lawyer and this is my personal view of the situation.

[AndyChristie]

We are over median.

I see what your saying, and honestly i didnt think of it that way. Thank you for pointing it out. We'll be meeting with the lawyer again to pay the retainer and go over a few more details. Ill ask him to go thru the living expenses with me again just so i understand what hes accounting for.

[justbroke]

We are over median.

I see what your saying, and honestly i didnt think of it that way. Thank you for pointing it out. We'll be meeting with the lawyer again to pay the retainer and go over a few more details. Ill ask him to go thru the living expenses with me again just so i understand what hes accounting for.

Excellent! Be sure to ask your lawyer questions until you're comfortable. You may actually never be comfortable as to the payment, but you should feel comfortable about your lawyer's competency and they s/he is fighting for you to have the best and most accommodating plan.

While Chapter 13s allow you to keep your toys (personal property), it does so in a manner which doesn't deny unsecured creditors a fair opportunity to get "at least as much as they would have, had you filed Chapter 7 and liquidated your non-exempt assets".

[indebt00]

phillips and assoc you must be in phoenix. they are awful...run from them.

remember that the attorney uses the fed guildlines for your budget (in az they do) and NOT what your true expenses are. this sucks but is such.

remember too that your payment is based on your income and those deductions....not your actual costs.

we are including our car in the bk...were told this is a must...this would help you afford the truck I would think???

good luck !!!