Chapter 13 Auto 910 day rule

[speedracer1263]

I searched google and still came up short on a clear answer. I also searched the forum and didn't find the answer. I may not be using the correct search term. I apologize in advance if the question has already been asked.

I am in the process of filing chapter 13 in Ohio. I placed the car inside the plan. I understand the the 910 day rule on cramming down the loan. I don't know if it applies to my situation.

I purchased the car 3/07 for 19,000 . I refinanced in 2008 . I still owe about 15600.00 on the vehicle. When does the 910 rule begin?

[jetsfan2010]

from what I understand it is based off the time you started the loan, which would be in 2008 based off your refi of the car.

[lrprn]

Since you refinanced the car loan in 2008, the day you signed those refinance papers starts the clock on your 910 days before filing. You didn't give the 2008 date, but even if it was January 2, 2008, that's still only 726 days as of today. That's means that you don't qualify for the 910 rule so you cannot 'cram down' your loan's value to the car's current value when you file.

speedracer, I get the sense you are trying to file a Ch 13 on your own without an experienced bk lawyer's help - are you? If you are, then you need to understand that your chances of doing so successfully is very low (like a percent in the single digits). It's going to take a lot more study than general internet searches and reading this forum to file a viable Ch 13 plan that can be confirmed on your own.

Although we've had 2-3 members over the years file their own Ch 13s pro se (without a lawyer) successfully, we've had many, many more who have crashed and burned with a case that's a mess that creates all kinds of legal troubles for them they could have avoided with competent legal help. Our few successful Ch 13 pro se filers studied Ch 13 resources like mad for months. One worked in a legal firm before (not bk). And still these filers still didn't know what their local court's trustee and judge would allow when putting together a realistic plan.

If you are filing without a lawyer, I strongly encourage you to at least set up 3-4 free initial consultations to discuss your case first.

And if you are filing with a lawyer, than please ignore what I just said about filing a Ch 13 pro se

[despritfreya]

In actuality the 910 rule may not even apply. This is why OP needs to find a qualified attorney. By the terms of the Code, the 910 rule applies if 1)the creditor has a purchase money security interest, 2) the debt was incurred within the 910 days prior to filing and, 3) the collateral is a vehicle acquired for personal use. If the debt does not match any of the 3 requirements then the window is 1 year and even that is questionable if the debt is not purchase money.

OP states that the loan is a refinance. While it could be argued that a refinance is traceable to the purchase money loan, it simply is not a purchase money security interest and, therefore, should not be subject to the 910 rule. I have made this argument several times to the lenders and in each, the lender backed off. I have not done research as it relates to the tracing issue as I have not had to litigate my position.

OP needs to consult with an attorney to see if the 910 rule even applies. I know if OP was my client, I would be doing a cramdown so long was we were beyond 1 year.

Des.

[justbroke]

I am with Des on this and this is exactly how I was able to cramdown a car in a Chapter 13. Basically, the refinancing destroys the purchase money characteristic of the original loan and is therefore not afforded the protection from the so-called "hanging paragraph" in 11 USC 1325(a). I had no opposition from the creditor on this and I crammed down the vehicle in my Plan.

As Des writes, please consult your attorney! I see no problem with cramming down that vehicle.

Des, I looked into the traceability issue and it only appeared to be a factor if the refinancing was done by the same lender. In those cases, the real issue is one of novation and whether any new consideration was given.

[despritfreya]

Des, I looked into the traceability issue and it only appeared to be a factor if the refinancing was done by the same lender. In those cases, the real issue is one of novation and whether any new consideration was given.

Makes perfect sense. Thanks for the info.

Des.

[justbroke]

Here are the cases that I cited in my Motion to Value Collateral...

Matthews v. Transamerica Fin. Servs. (In re Matthews), 724 F.2d 798 (9th Cir. 1984) (concluding that refinancing destroys the purchase-money character of the obligation it replaces)

In re Moody, 97 B.R. 605, 607 (Bankr. D. Kan. 1989) (found that the PMSI status held by retailer was lost when the debtor refinanced with a third-party creditor)

In re Richardson, 47 B.R. 113, 118 (Bankr. W.D. Wis. 1985) ("[W]here a third party . . . advances money to the debtor which is applied to the balance of the original note . . . . [T]he PMSI is extinguished.").

[HHM]

I concur, you would argue that the Refi is not a PMSI and therefore the 910 rule is not applicable. I still think you run into good faith issues if you try to cram within 1 year of a refi, but still, you may not need to worry about the 910 day rule.
But, as LRPN notes, if the rule applied, the start date would be the date you signed the refi loan docs.

[justbroke]

Yes, I agree that the 1 year issue is still there and should be the first threshold.

[jetsfan2010]

well my lawyer tired to cramdown my car loan, originally bought in sept 08 the difference in what is owed(19k) to what is worth (13k) could be a nice difference in the payment. the trustee brought it up in the 341 however.

[speedracer1263]

Thanks to everyone for the help. I do have an attorney. I spoke with his paralegal who is preparing the plan. She stated the auto couldn't be "crammed down". I needed to understand for my self. I have a 2007 ford taurus with a balance of 16000.00 that is worth 4051.00. grrrrrrrrrrrrrr

[justbroke]

Thanks to everyone for the help. I do have an attorney. I spoke with his paralegal who is preparing the plan. She stated the auto couldn't be "crammed down". I needed to understand for my self. I have a 2007 ford taurus with a balance of 16000.00 that is worth 4051.00. grrrrrrrrrrrrrr

Since you indicated that you initially purchased it in 2007 and refinanced it in 2008, I would politely ask to schedule an appointment with the attorney himself! You should be able to cram down a refinanced vehicle easily.

[speedracer1263]

Since you indicated that you initially purchased it in 2007 and refinanced it in 2008, I would politely ask to schedule an appointment with the attorney himself! You should be able to cram down a refinanced vehicle easily.

Thank you very much!! I am going to call tomorrow. I am new to chapter 13 and realize it is very complex. I now have hope!! Thanks.