7 or 13??

[TexasDog]

Here is my deal. Married with 5 kids. I have about 35k in debt. Most of this debt I am not paying on right now. About 50% of my debt is 2 car payments. 1 car is 3 yrs old and has 100k miles on it. I'm upside down in it for about 5k. monthly payment is 500. The other car is 2 yrs old 50k on the miles. not upside down in it but payment is 360 a month.

Lawyer is pushing me to 13, says monthly payment plan would be between 500-600 a month. I'm just scared to tie the cars into this plan for 5 yrs.

I'm kind of wanting to do chap 7 keep the 360 a month car and let the other go. And hope a yr later I can trade this car in for a lower payment?

Any Thoughts?

[lrprn]

Welcome to BK Forum - glad you found us!

Lawyer is pushing me to 13, ... I'm kind of wanting to do chap 7...

From this I'm assuming your gross family income from all sources for the last six months is close to the annual Texas median income for your family size of 7 which is $80,069 - see http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm

Whether you can file Ch 7 or Ch 13 depends on how much (if any) disposable income shows on the required Means Test. Did the lawyer state Ch 13 after seeing your income or did he/she actually do a dry run on the Means Test?

[JRScott]

What have you and your wife made in the last 6 months?

How many lawyers did you consult with so far?

[TexasDog]

My wife just started working a month ago. I make 45k a yr. I have only seen 1 lawyer and he just asked basic questions about income and expenses. He was alittle concerned about the "910" rule. I think my cars 700 to 800 days.

After he got all info from us, he explained the difference in 7 and 13. I think he was pushing 13 cause he was concerned how we would be able to get 2 more cars. I would like to go pay cash for a new one but it would take 3 or 4 months to build the cash. In the mean time, My other cars would get repo. So I got alot to think about.

[lrprn]

My wife just started working a month ago. I make 45k a yr.

You didn't say how much your wife was going to make at her new job, but unless it's over $35,000/year, you still will be under the median income for your family size in Texas for a number of months to come.

I think he was pushing 13 cause he was concerned how we would be able to get 2 more cars.

Buying new cars is not a huge deal after Ch 7. Within a year with excellent post-bankruptcy on-time payments, you'll get good offers. After two years, you'll get offers as good as if you had never filed. Take a look through the Post-BK area here and read about the success our members have had buying a new car with decent terms within months of discharge!

If you can file Ch 7, then you should file Ch 7.

Make plans to interview 2-3 more bankruptcy lawyers in your area - this one put too much emphasis on post-bk car buying. It just isn't that hard.

[TexasDog]

If I do a 7 how long do I have before they come get the cars? Can a lawyer stop them from getting my cars til everything is filed and over?

[lrprn]

If I do a 7 how long do I have before they come get the cars? Can a lawyer stop them from getting my cars til everything is filed and over?

How long you have depends on how far behind you are on each car's payments. Most lenders will start repo efforts after two months of missed payments. The only thing that can stop the repo is to file bk or make a deal with the lender to catch up on the payments.

You said earlier you'd like to keep one car. You will have to be caught up on payments to file and keep it. If you are going to surrender both cars, then it won't matter.

Have you considered not paying on the car you want to surrender, not paying your non-secured creditors, and using that money to buy a used reliable new car for cash before you file?