What would you do?

[Dennis1971]

I was just wandering if anyone has any ideas on this. I have met once and paid the $100 down to an bk attorney. He said we should file a chapter 7, we have $60,000+ in CC debt. Our cars are all old and junk and not worth much at all, he said we were below the amount we were allowed and there wouldn't be any problem keeping them. We are keeping our house and a second mortgage loan on it. The only problem he thought we might have is me keeping my motorcycle. I didn't want to claim against it but he thought I might have problems keeping it. Its worth about $5000 and I owe about $3000 on it, but I have a signature loan at the same place for about $1800. Hes afraid the trustee will consider this a luxury item and take it. So after reading different cases in BK forum I am afraid that if we try to keep it the trustee will end up taking it. Its worth what we owe on it plus the amount we owe at my Credit Union on the signature loan and the motorcycle. Our payment on the motorcycle is around $150 a month. I am worried the trustee will give it to the credit union to try to recoup their loss on what we owe them and turn around and see that we have an extra $150 a month and put us on a payment plan of $150 a month.
I know its a small loss, but I am already paying $650 a month in gas and it will be considerably higher if I lose this. I would appreciate any advice, I realize losing a $5000 motorcycle is nothing if we can walk away from $60,000 in CC debt. We are just worried the trustee will view this as a luxury item.
The payment is due tomorrow and theres not going to be any money in this account, so I am trying to figure out what I am going to tell the Credit Union.


Thanks

[TX Bluebonnet]

The motorcycle itself isn't a luxery item. It's that you have more than one vehicle per household driver. Maybe you could get rid of the worst of your "old and junk" cars?

[Keebler]

When I discussed three vehicles with my attorney, he told me to exempt the vehicles where I have some equity and to reaffirm the third vehicle.

The third vehicle was the newest one and it was worth a bit less than the loan value. He explained that there's no value in it and the trustee wouldn't even think about taking it because the original lender would need to be paid and it would leave the trustee with nothing. For this reason, I didn't need to worry about exempting it because it wasn't going to be touched anyway.

So, the idea is to exempt anything that has value and a vehicle without any equity has no appeal to the trustee because there's nothing to get out of it.

I haven't filed, and this theory hasn't been tried, but it sounded like it made sense.

I think you should exempt the Motor Cycle and leave the junkiest of the old cars up for grabs and take a chance that the trustee won't want it.

[JRScott]

Motorcycles are usually considered luxury items when not used as primary transportation. Since you have more than one vehicle per driver then yes it is likely it will be seen as a luxury item.

I think your lawyer is advising you well. Since you also have a loan there it will probably make it harder to keep the motorcycle. Since it is also worth more than you owe on it the motorcycle dealership is more likely to seize it rather than allow a reaffirmation. Still I wouldn't let this stop you from filing.

As for the Credit Union don't tell them anything. If you've not got the money don't worry about it. Did the lawyer's office agree to take calls from creditors? If so just give them your lawyer's number and ask them to call him.

[deafbroke]

Suggestion and question for the experienced people here. Can this person donate her car to her church so that her motorsycle is then her primary source of transportation and allow her to keep it?

DB

[JRScott]

They'd have to report any such transfer of property and the Trustee could undo any such transfer.