Ch 13 Question

[gunsmoke]

I have plans to file ch 13 in in feb or march 06. I have estimated that my excess income after average monthly expenses will be aprox 700.00 month 5 yr plan. Since my 8 year old vehicle is paid for, should I trade it in on a newer model just to have a monthly car note instead of paying 700.00 a month to a trustee. Why waste 700.00 a month on a trustee when I could spend 350.00 to 400.00 month on a new vehicle and give 300.00 to 350.00 to a trustee to pay my cc debt for 5 years?

[bkfiler]

good question.

also, you will not get to file again after your bk. you should makre sur eyou have maximum health coverage, insurance and plenty of life insurance as well.

did you take the means test and are over it?

dont assume you should file a chap 13 at first. let an attorney figure it out for you. seek advice from a few until you start to see a pattern of what you need to do to protect yourself.

i believe you are allowed a certain amount toward a vehicle but not sure if that has to do with a chap 7 qualification. i think it applys to chap 13 as well.

[gunsmoke]

thanks bkfiler

Thanks bkfiler, will use attorney,definate ch 13, single no kids 46,000 yr. Already maxed life and health insurance added a flex medical spending account. Only secured loan is home 500.00 mo. and a hell of a lot of cc debt. There is a 475.00 max on the ch 13 means test for 1 car ownership, but looking at other ch 13 on pacer, the trustee is not allowing it. There is only one ch 13 trustee in my area so i'm stuck with him. Guess i'll go truck shoppin.

[FoolAndHisMoney]

Thanks bkfiler, will use attorney,definate ch 13, single no kids 46,000 yr. Already maxed life and health insurance added a flex medical spending account. Only secured loan is home 500.00 mo. and a hell of a lot of cc debt. There is a 475.00 max on the ch 13 means test for 1 car ownership, but looking at other ch 13 on pacer, the trustee is not allowing it. There is only one ch 13 trustee in my area so i'm stuck with him. Guess i'll go truck shoppin.

Can't imagine why the trustee won't allow it. This is what they wanted, I thought. Base the plan on IRS collection standards. I can understand if someone purchases the car a month before just to take advantage, but if it's a "normal" payment for your area then they should allow it.

We always make the comparison of "death & taxes". Now we find out that the trustee is more strict then the tax man. I feel that if the IRS allows it THEN IT'S ALLOWED! PERIOD!

[SinkingFast]

I have plans to file ch 13 in in feb or march 06. I have estimated that my excess income after average monthly expenses will be aprox 700.00 month 5 yr plan. Since my 8 year old vehicle is paid for, should I trade it in on a newer model just to have a monthly car note instead of paying 700.00 a month to a trustee. Why waste 700.00 a month on a trustee when I could spend 350.00 to 400.00 month on a new vehicle and give 300.00 to 350.00 to a trustee to pay my cc debt for 5 years?

According to what I learned tonite in a consult, you won't be making the car payments. The Trustee will make them for you. We currently have a car payment of $250/mo. The attny felt we could get a Hardship Ch 13 with a payment of $450/mo, paid by payroll deduction direct to the Trustee. The Trustee would take over paying our car payments from the $450/mo. So our Ch 13 would basically cost $200/mo.

If that's true, why not get a new vehicle out of the $700/mo you will be paying. It's not like you'll be able to take on new debt while you're in Ch 13. Might as well get it while you can.

[StaciMM]

If you do decide to try it, a couple of thoughts... Be prepared to defend your decision. If the car you have is in good condition, and is reliable, then the trustee might think it bad faith to go out and get a new car when you were having trouble paying your credit cards. Don't go for anything flashy. No one 'needs' a sports car when they're approaching BK. And, if possible, let a few months pass between getting the car and filing.

[gunsmoke]

Of course Staci, nothing fancy just an average 5 yr payment not over 475.00 mo. If he questions my trade in, i'll tell him it was a piece of junk. I have changed my mind about when to actually file bankruptcy. Was going to file feb. or march 06, but I think that i'll wait until august or sept. Not in a big hurry to file unless someone attempts to get a judgement plus garnishment. Thanks for opinion, Gun

[StaciMM]

One other thing Gunsmoke-do you have non-exempt equity in your home or any other asset? If so, this will set a minimum that needs to go to your creditors. You don't want to back yourself into a corner where you can't meet that minimum.

Example-$25,000 in non-exempt equity so at least $15,000 needs to go to unsecured (in addition to any priority debts, like taxes, past due mortgage payment, etc.) plus trustee's fee and attorney's fee if any of it is to be in the plan. That would mean an average of at least $250 per month would need to go to the unsecured creditors. If your disposable income drops from $700 to $225, you won't be able to do a 13.

[gunsmoke]

no non exempt equity. no due taxes. mortgage caught up. plan to continue mortgage payments and new vehicle payments on my own. this bankruptcy will be about excess cc debt aprox 52,000.00. Good nite Gun

[bkbiker]

no non exempt equity. no due taxes. mortgage caught up. plan to continue mortgage payments and new vehicle payments on my own. this bankruptcy will be about excess cc debt aprox 52,000.00. Good nite Gun