If I have very little equity...

[teresa]

in a vehicle/home, will I have to liquidate in a Ch 7? What happens to my vehicles in a Ch 13?

[keepmine]

If the equity in a home or car is below what your state exempts, you don't need to liquidate. You reaffirm the debt and continue to pay.
In a chapter 13, if you've owned the car for over 30 months {900+ days-forget the exact number} you may be able to cramdown a portion of the car. In other words instead of being responsible for an auto loan where you're upside down, they'll reduce the loan to a present market value.
In a Chapter 7, you may be able to do a 722 redemption that accomplishes the same thing.

www.722redemption.com has a nice explanation.

Have you scheduled a meeting with an attorney?

[SinkingFast]

In order to go Ch 7, you'll have to pass the Means Test. If you pass the Means Test, you can file for Ch 7. Ch 7 is Liquidation. You'll have to be current on your house and car loans in order to keep the property. If you are in arrears on your home and/or cars, you'll loose the property. You'll only be allowed a certain $$ limit of exemptions for your Homestead (house) and vehicles. Exemptions are based on the State you live in and apply to the equity you have in the property.

For Ch 13,....... New Law, the Creditor on an auto loan is able to get the actual value of the vehicle plus the % of your debt repayment in a Ch 13 plan. That's a % of the difference of the value to loan amount.

Example,.............. Say your Ch 13 plan puts you at a pay back rate of 20%. If you owe $10,000 on a vehicle worth $5,000, the Creditor can get the $5,000 actual value of the vehicle plus 20% of the $5,000 difference of the value to loan amount. $6,000 total.

If you are in arrears on your home and/or auto loan payment, the arrears amounts can be put in your Ch 13 plan payments.

[teresa]

Yes, I have an appointment of Thursday. I'm eager and have a lot of questions for him. I'm so glad you you all are here to answer in the mean time. Thanks

[teresa]

OK, I've seen this formula before, but it finally just now "clicked" for me. I've been debating letting the vehicles go because we're so upside down, but the new law Ch 13 might work for me too.

[keepmine]

1325 of the bk code has a big qualifer as far as a Chapter 13 cramdown.

For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day preceding the date of the filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor, or if collateral for that debt consists of any other thing of value, if the debt was incurred during the 1-year period preceding that filing