Question Need help deciding! Please

[mauleg0615]

I am in a hurry to get to work so I will try to make this as clear as possible. Here is my situation. My wife and I filed last week on Nov. 30th. My 6 month income came to around $32729 and both my wifes income come from social security disability and a federal gov't annuity from being retired disabled. We were told by our attorney that my wifes income will not be counted so it will be mine. We have a family of 4 here in Arizona. We have 3 cars. One is paid off and worth $2900 on KBB. The other two we owe alittle over $2000 each both to be paid over in several months. One is worth $9400 and the other $20,000 KBB fair market price. We are current in both and also on the house and are $45,000 in unsecured debt. $6500 in student loan and $2300 in IRS. We decided to do a Chapter 13 because of all the equity on the cars and they are almost paid off. Plus our daughter started college and uses one of the cars. I have religously taken very good care of them. So they are very reliable. Today the attorney told us that we are border line in income to do either a Chapter 7 or 13. I understand that if we did a 7 both our cars that are nearly paid off and have much equity in them will be taken and that each my wife and I will be given $5000 each for the exemption here in Arizona for autos. So then that leaves us buying two vehicles worth only $5000 each that may not be too reliable or put $10000 down and buy one new reliable car. Then spend another 4 to 5 years making payments. Chapter 13 will allow us to keep all vehicles and pay them off by July 2012 then keep them for another 5 to 8 years. I understand from my attorney that our repayment plan will not be 100% since only my income will be counted. So if any of you were in our shoes which Chapter would you use? 7 or 13? I hope I explained myself enough! Thanks for any answers

[mauleg0615]

By the way my income of $32729 which comes to $65458 a year includes alot of overtime. My base yearly income is $53000. Thanks again

[keepsmiling]

Did you actually file or just retain your attorney? Do bear in mind that if you go with a 13, you will be expected to pay more towards your unsecured debts once your car payments are finished.That $4000 will wind up going out of pocket again since it will then be disposable income.

Also, your student loans will go into deferment (unless you can squeeze out some payment to them while in your 13) and continue to accrue interest. Just a thought to help aid you in your decision.

It might be worth considering buying a new car and doing a 7, especially while your credit is still ok.

The general consensus seems to be that if you can do a 7, you are usually better off. Over and done in 2 months instead of 5 years.

[chrisdfw]

Sell the cars and pay off the student loan and IRS debt since it cannot be discharged anyway.

Put no more than 5000 down on newish reliable cars. just keep the equity within the exemption.

It should be easier to qualify with car payments for a chapter 7.

Just what I would ask my attorney about.

You need to dismiss the ch 13, and do a 7 in my uneducated opinion

[keepsmiling]

Good advice, provided OP hasn't actually filed yet.
Hoping that was just a slip and he meant to say "saw/retained lawyer"