What a bummer of day :(

[laurannm]

The $489 rule applies to the means test and 22C. I does NOT apply to your schedule J, where you can list your actual expenses (although it is unlikley a trustee will allow you to use more than 2 cars as an expense on your schedules).

On your means test (and 22C I believe) you are only allowed to use the IRS standards for 2 or more cars, which is $489 x 2, or $978.

[TooMuchCredit]

I am still confused on how that works a on 22A for Ch7 and 22C for Ch8, yes on the local expenses line you take 489 minus the actual payment and if less than 0, enter 0. However further down you list your secured creditors and those payments.

That is how your actual mortgage expense gets factored in.

If you were only allowed 489, then on the local standards line you should hve to list a negative number so where you list your secured further down is offset buy that amount and is limited to 489.

Sorry if I am missing something :-)

[justbroke]

If you were only allowed 489, then on the local standards line you should hve to list a negative number so where you list your secured further down is offset buy that amount and is limited to 489.

It's not that simple.

The calculation on B22C line 47 is for future secured payments. The line where the automobile values go are lines 28 and 29. This is an allowance. The key is, that you don't get any part of the allowance where it exceeds what your actual cost is. The reason you put a $0 instead of a negative number, is because it's an allowance. They can't take money away you in the allowances section of the form.

[TooMuchCredit]

It's not that simple.

The calculation on B22C line 47 is for future secured payments. The line where the automobile values go are lines 28 and 29. This is an allowance. The key is, that you don't get any part of the allowance where it exceeds what your actual cost is. The reason you put a $0 instead of a negative number, is because it's an allowance. They can't take money away you in the allowances section of the form.

I am sorry to be dense here...

Line 47 says:
Future payments on secured claims. For each of your debts that is secured by an interest in property that
you own, list the name of the creditor, identify the property securing the debt, state the Average Monthly
Payment, and check whether the payment includes taxes or insurance. The Average Monthly Payment is the
total of all amounts scheduled as contractually due to each Secured Creditor in the 60 months following the
filing of the bankruptcy case, divided by 60. If necessary, list additional entries on a separate page. Enter the
total of the Average Monthly Payments on Line 47.

Now on 28 I enter 0 because my payment is above the $489 local standard amount. Now on 47, I enter my contractually due amount for the vehicle which is above the 489 standard. Same with the mortgage, it too is above the standard.

Where does the disallowance of the amount above $489 come into play on the form?

I am not seeing the difference in the wording on the form that allows an above standard house payment, but not above standard car payment. 25B for the mortgage expense is also 0, since my mortgage is higher than the local standard. I get to subtract that full amount from my income, but why not the vehicle.

[justbroke]

Where does the disallowance of the amount above $489 come into play on the form?

It comes from caselaw. Generally, anything that is not necessary for the effective reorganization of the debtor is not allowed.

Caselaw has proven time and time again that a debtor's homestead is necessary for the effective reorganization of the debtor. That's why, generally, they won't complain about mortgages which exceed the IRS allowances. (There still could be a "good faith" objection for for exceptional amounts on a mortgage.)

The corollary is that an expensive car, is not necessary for an affective reorganization of a debtor.

I am not seeing the difference in the wording on the form that allows an above standard house payment, but not above standard car payment. 25B for the mortgage expense is also 0, since my mortgage is higher than the local standard. I get to subtract that full amount from my income, but why not the vehicle.

You can put a higher value for a car on Form B22C Line 47, but it is going to be rejected by the Trustee. This is an area of expenses that they monitor carefully.

What you'll get is a "good faith" objection if you try to put something that is considered "luxury" on line 47. Plain and simple.

This is why a seasoned lawyer is handy for filing. They know what the Trustee's hot buttons are. I'll tell you that if the Trustee doesn't object, an unsecured creditor certainly will if you're paying for an expensive (luxury) car (over the $489/month) and not paying secured creditors... or not paying them 100%.

[TooMuchCredit]

It comes from caselaw. Generally, anything that is not necessary for the effective reorganization of the debtor is not allowed.

Caselaw has proven time and time again that a debtor's homestead is necessary for the effective reorganization of the debtor. That's why, generally, they won't complain about mortgages which exceed the IRS allowances. (There still could be a "good faith" objection for for exceptional amounts on a mortgage.)

The corollary is that an expensive car, is not necessary for an affective reorganization of a debtor.

You can put a higher value for a car on Form B22C Line 47, but it is going to be rejected by the Trustee. This is an area of expenses that they monitor carefully.

What you'll get is a "good faith" objection if you try to put something that is considered "luxury" on line 47. Plain and simple.

This is why a seasoned lawyer is handy for filing. They know what the Trustee's hot buttons are. I'll tell you that if the Trustee doesn't object, an unsecured creditor certainly will if you're paying for an expensive (luxury) car (over the $489/month) and not paying secured creditors... or not paying them 100%.

If they removed the "Do not enter an amount less than zero" from line 28, the math would show that local standard is the max allowed.

I.E. if your payment was $500, you'd end up with -$11 on line 28, then when you put $500 on line 47, it would total to $489.

So I guess the form as it stands now, doesn't match the law behind it.

Oh well. I'll just have to eat it. I didn't see myself as upgrading...the new car has everything that my old one did. I drive alot - out of town for work everyweek. My old car was over the standard too. There's no way I can afford 100% payback even with 0% interest in 60 months. I'd have nothing after mortgage, car, utilities and that payment.

[justbroke]

I.E. if your payment was $500, you'd end up with -$11 on line 28, then when you put $500 on line 47, it would total to $489.

So I guess the form as it stands now, doesn't match the law behind it.

SOunds simple, but you can't have a "negative" allowance... and the lines 24 through 38 are allowances. Nothing can be negative on those lines... just by definition. You're either allowed something, or not. We dont' subtract money in any category.

Plus, other parts of the form depend on those numbers being non-negative. What you put on the epxenses lines, like 47, 48 and 49, may be used to calculate the amount which goes through the Trustee which affects the Trustee payment.

Oh well. I'll just have to eat it. I didn't see myself as upgrading...the new car has everything that my old one did. I drive alot - out of town for work everyweek. My old car was over the standard too. There's no way I can afford 100% payback even with 0% interest in 60 months. I'd have nothing after mortgage, car, utilities and that payment.

Again, they may not say anything but it is an area where they look for "extravagance" (luxury).

I know that eCast Settlement (a large buyer of unsecured bankruptcy claims) is known for doing bad faith objections when it appears people are abusing the car allowance.

It's possible, that this passes without objection. I'm just letting you know a.) how the calculation is performed and why, and b.) that using a vehicle payment higher than the $489/month may raise eyebrows.

[TooMuchCredit]

SOunds simple, but you can't have a "negative" allowance... and the lines 24 through 38 are allowances. Nothing can be negative on those lines... just by definition. You're either allowed something, or not. We dont' subtract money in any category.

Plus, other parts of the form depend on those numbers being non-negative. What you put on the epxenses lines, like 47, 48 and 49, may be used to calculate the amount which goes through the Trustee which affects the Trustee payment.

Again, they may not say anything but it is an area where they look for "extravagance" (luxury).

I know that eCast Settlement (a large buyer of unsecured bankruptcy claims) is known for doing bad faith objections when it appears people are abusing the car allowance.

It's possible, that this passes without objection. I'm just letting you know a.) how the calculation is performed and why, and b.) that using a vehicle payment higher than the $489/month may raise eyebrows.

I appreciate your responses. I wish I had done a bit more research BEFORE I went and got the particular car that I did. I did find the following that might give a little hope that a challenge to any objection might work. I am not sure of the date of the article. http://www.abiworld.org/committees/n...rvol5num3c.pdf

[justbroke]

I appreciate your responses. I wish I had done a bit more research BEFORE I went and got the particular car that I did. I did find the following that might give a little hope that a challenge to any objection might work. I am not sure of the date of the article. http://www.abiworld.org/committees/n...rvol5num3c.pdf

Well, and that assessment ends where I ended. WHile I never mentioned any specific part of Title 11 (the Bankruptcy Code) which prevents claiming an expensive car... I consistently stated that you may get a bad faith objection.

Now, all plans must be submitted in good faith that that you are committing all of your disposable income to the unsecured creditors (and the Plan).

Your mileage will vary, based on your Judge and Trustee.

[JJL]

I think $489 is very generous. your filling bankruptcy after all

[TooMuchCredit]

I think $489 is very generous. your filling bankruptcy after all

Yeah it is generous. But now I am in a rock and a hard place. It's secured, so I am obligated to pay. If I surrender it, the difference in the actual value gets tacked onto my unsecured debt.

The kicker is I have to have a car to work. I work in another city 1-2 days each week and that's 100+ miles there each week. So then I am faced with trying to get another car that will likely require a large down payment and 24%+ interest rate.

Now the difference in the $489 and my car payment amounts to between $8-$10K over a 5 year period. Now if I surrender the car I have the difference in it's value and what I owe on it which probably would take care of 1/2 of that.

With the amount of debt I have that might make a few more percentage points I can payback.


So through my ignorance I screwed myself. I should have looked for a car with payments no higher than $498.

[justbroke]

I know you don't want to hear this, but the Trustee doesn't care... unfortunately.

I heard of a judge who, with a guy who was engaged for 2 years to his fiance and taking care of the kids as though they were his own, denied him the right to claim a family of 4 in a Chapter 13. The Trustee basically stated that the relationship is not legally binding and thus, the guy had no legal responsibility to support them.

They don't care... Bankruptcy is s a technical proceeding. It's all about the technicalities, not about the human side of it.

Again, let me reiterate... you can put the amount on your forms, and see what happens. You may not get any objection... but you need to hope for the best, and prepare for the worst.

[caninebk]

Methinks U need to look around for a MUCH better advisor (attorney). Whether a "stupid" move or something else... folks have done this before and survived in BK. Ask for a second, third opinion.