? about new car payment/s

[tammygirl1]

Background, we live in N. California with 5 people in the family. When we started the process of 13, both my husband and my cars were completely paid off. His was a 94 Camry with 287k and mine is a 03 Tahoe with 159k. Our lawyer did not recommend replacing either of our cars but from this website I broached him about replacing the Camry and he agreed since our credit is still decent. We went ahead and purchased a newer car with low milage. During that time our lawyer had sent our draft petition (without the new car included, just old stuff). Our payment estimate was going to be $782ish before). We do have about $22k in combined IRS/Child support arrears to pay off within the plan additional to any unsecured creditors. My question is, will our payment plan be any different now with the new car payment than before..and I am thinking we very well should trade in the Tahoe to get something with less mileage while we still can. Will this again change our payment plan? I am not sure we could afford too much higher payment plan than what is proposed right now. I get confused on the allowed expenses on paid off vs cars with payments.
Thanks for your advice/knowledge in advance.

[newbie2]

Background, we live in N. California with 5 people in the family. When we started the process of 13, both my husband and my cars were completely paid off. His was a 94 Camry with 287k and mine is a 03 Tahoe with 159k. Our lawyer did not recommend replacing either of our cars but from this website I broached him about replacing the Camry and he agreed since our credit is still decent. We went ahead and purchased a newer car with low milage. During that time our lawyer had sent our draft petition (without the new car included, just old stuff). Our payment estimate was going to be $782ish before). We do have about $22k in combined IRS/Child support arrears to pay off within the plan additional to any unsecured creditors. My question is, will our payment plan be any different now with the new car payment than before..and I am thinking we very well should trade in the Tahoe to get something with less mileage while we still can. Will this again change our payment plan? I am not sure we could afford too much higher payment plan than what is proposed right now. I get confused on the allowed expenses on paid off vs cars with payments.
Thanks for your advice/knowledge in advance.

I'm more than a bit confused. When you state your attorney sent the "draft petition" do you mean he sent you a copy or sent the petition to the court and you have officially filed?

If you've officially filed and your attorney didn't include your new car and payment then this needs to be done. Today. Pronto.

Yes, your payment plan could change because now you have a debt that the petition doesn't reflect. Your disposable income is different than what was stated on your "draft" petition.

Please call your attorney and update him. Don't think about adding a 2nd additional debt to the mix before talking to him.

[tammygirl1]

Thanks Newbie2...I am good at gettting people confused...sorry . No we have not filed yet. It was my draft to look over and change anything that seemed out of wack and send back to him. I did ask the attorney about replacing the old car and he was in agreement as long as it was 'within my means' and to let him know if we paid any cash down for it along with the financing. Once we bought the car, I sent him an email with all the details and the loan agreement. I am sure it will be on the next draft he mails me to look over. I am just thinking about my 2003 with 159k miles on it. Its in good condition but just not so sure it will make it through the next 5 years...but then again it should :-).
Thanks again for your advice.

[newbie2]

Thanks Newbie2...I am good at gettting people confused...sorry . No we have not filed yet. It was my draft to look over and change anything that seemed out of wack and send back to him. I did ask the attorney about replacing the old car and he was in agreement as long as it was 'within my means' and to let him know if we paid any cash down for it along with the financing. Once we bought the car, I sent him an email with all the details and the loan agreement. I am sure it will be on the next draft he mails me to look over. I am just thinking about my 2003 with 159k miles on it. Its in good condition but just not so sure it will make it through the next 5 years...but then again it should :-).
Thanks again for your advice.

Whew. I'm glad to hear you hadn't officially filed yet :-) Yes, by all means call your attorney and ask him about the 2nd car. That is alot of miles and probably won't last the 5 years. (We've replaced 2 vehicles - for cash- during our plan. Not fun. Not pretty. )

Good luck!

[tammygirl1]

Can someone tell me if I start off with an estimated payment plan of 783 (with 2 paid off cars) then decide to trade in/sell these cars (before filing) and end up with 2 car payments...will my expenses go up therefor lowering my payment plan to even out or will I still have to pay the 783 + car payments (outside of payment plan)? This is where I get confused..
Thanks in advance.

[NoTomatoCan]

Can someone tell me if I start off with an estimated payment plan of 783 (with 2 paid off cars) then decide to trade in/sell these cars (before filing) and end up with 2 car payments...will my expenses go up therefor lowering my payment plan to even out or will I still have to pay the 783 + car payments (outside of payment plan)? This is where I get confused..
Thanks in advance.

This is difficult to answer without knowing more details about what the $783 payment is going to in your plan.

In theory, if the $783 was all going to unsecured creditors, and you added an additional legitimate expense (like a car payment) then your payment of $783 would simply be offset by the amount of the car payment and you would not see an impact to your budget.

If the $783 was all going to priority or secured debt, with zero (or minimal) going to unsecured creditors, then you would not have anything to offset and you would be paying the $783 PLUS the car payment.

These are very generic examples, but with more specifics on what you are paying for in your plan you can get a more specific answer.

[tammygirl1]

Thanks NoTomatoCan

Details:
#laywer came up with: 783@60months

9250 back taxes (to be paid back in plan)
14200 childsupport arrears (to be paid back in plan)
96621 cc
40000 2nd (which will be stripped)

2771/mo 1st (keeping home)
74/wkly 401k loan (13k total/185 wkly payments to go) (paying outside plan)
80/mo stepson ortho - 1400 total (not sure paying outside plan yet...since paying exwife monthly but draft has it as creditor for now..)
356 current child support (paying outside plan)


Family of 5 in N. California
12529 gross combined monthly (6 month lookback) but got raise recently of 4800 per year

[LadyInTheRed]

I'll give this a shot. $783 x 60 = $46,980. That needs to cover the back taxes, child support arrears, any attorney fees being paid in the plan and trustee fee (9.5% in NorCal) and anything else being paid inside the plan. The taxes and child support total $23,450. I calculate $4,462.10 in trustee fees (but, don't count on my math). Let's say you are paying $1,500 in attorney fees in the plan. That leaves $17,487.90, or $291.46 per month to unsecured creditors based on your attorney's original calculations. If the purchase of the new vehicle(s) increases your automobile related expenses and the car payments are made ouside the plan, the monthly trustee payment and amount to unsecured creditors (including the stripped 2nd mortgage) will decrease in an amount equal to the increase in automoblie expenses (loan payments, insurance, registration, fuel, maintenance - the first 3 will probably increase and the second 2 will hopefully decrease). If the increase in auto expenses is more than $291.46, you'll need to adjust your budget to come up with a feasible plan. If your raise is not included in your projected income on the first draft, the additional income will help if you come up short.

[debtinohio]

That's about what I pay with that same income, house and similar C/S payments. Mines $2000 but includes $1200 in car payments so it would be around $800 without those.

Note - it is still subject to trustee objections, etc. which can increase the payment amount but I would replace the car with one under the $489 IRS limits that also fits in your overall budget.

[tammygirl1]

Thanks for your input! It makes me feel better. I am just nervous about adding car payment debts then be straddled with the original payment plan amount which would put me back where I was when I was trying to pay everything...