Have questions about a TX CH 13

[alaska708]

Need help here in the Dallas area. I had a ch 7 discharged in 10/2018, going to have to file a ch 13 now due to bad decisions and a recent divorce completion. Question is this, I have a 2010 Toyota Corolla with 127,000 miles that I have financed with OneMain Financial at 26% Interest and a monthly payment of $378 for 4 years. Car on its last legs, can’t get a loan to get the lien back! Can I just buy a new car while I have decent enough credit to do so and then stop paying OneMain and my credit cards? If I file Ch 13 on OneMain I assume the court can force them to repossess the vehicle?

I make $62,000 in Dallas, am single. Owe the IRS $3,000 that I want to include in the ch 13. How will I know if it’s a 36 or 60 repayment plan? Will the new car, if I buy one be paid inside the ch 13 or will this be separate from the ch 13 monthly payment? I just need help, got myself into another bad financial situation. Just don’t make enough monthly income to live properly.

[justbroke]

Do you understand the 2-4-6-8 rule when it comes to repeat bankruptcy filings an 8 year period?

When did you file in 2018? If I work backwards and say you filed in June 15, 2018, then you would be eligible for a dischargeable Chapter 13 after June 14, 2022 under the 2-4-6-8 rule. If you file a Chapter 13 within 4 years of receiving a Chapter 7 discharge, then you will not receive a discharge of any debt.

No court can force any creditor to exercise their rights of repossession, foreclosure, or suit. Even if you surrendered the vehicle in the Chapter 13, OneMain would still have to be paid the residual value which sounds like that's still going to be some thousands of dollars. (Example, if you say that you still have 4 years at $378/month that's over $18,000 over 48 months. Even if "re-amortized" in a Chapter 13 of 60 months, that's $302/month that you'd pay... for 60 months.)

Your plan duration (length) will be based on whether you are under-the-median income. If you are under, then you can propose a plan of no less than 36 months. But, the problem is likely that you may need to propose a 100% plan since there is no discharge.

I don't know how I would personally handle this. Your kicker is going to be that you receive no discharge, so surrendering a vehicle doesn't do anything in the grand scheme of things, at least that I can see. OneMain just files a claim and has to be paid back regardless. Unless you can afford another car and the debt in the Chapter 13, your plan may be infeasible.

You're definitely going to need someone to work the numbers.

[alaska708]

Thanks for your comments, I won’t file the 13 until that 4 year period has passed.

[justbroke]

It would be up to you to decide to delay filing and take the chance with OneMain Financial. Those types of companies like OneMain are quasi-predatory lenders of opportunity. They are local because they will file a lawsuit rather quickly. The question would become whether you can avoid garnishment if they file suit really quickly, before you're eligible to file a new Chapter 13 bankruptcy in June/July 2022.

But, if this were April/May of 2022, it could be foreseeable to get a new vehicle but that may be difficult. Most car lenders use your debt-to-income ratio to determine whether you can afford the new vehicle. The OneMain Financial load would still be reporting. I don't know what else you have reporting, but that would be your largest hurdle.

[alaska708]

I would finance a new car first for 72 months. Stop paying OneMain Financial at that time and file 4-5 months later. I live in Texas so they wouldn’t be able to garnish my wages. I just want them to come get the car as it’s about ready to fall apart. Yes I know it was my fault for taking out the loan but I was desperate. Will not reaffirm this loan at all.