Originally posted by Carmella
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Old car included in the petition
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If you have a lot of unsecured debt, stopping the interest is wonderful. We could not get out from behind our minimal payments since so much of our payment to credit cards went to interest vs principal. In the 100% plan we knew what they were taking each payment and that the amount of debt decreases and will be done in 5 yrs.
Our plan didn't ever increase except for the PLANNED increase once our car was paid off they upped our payment by that amount $227 per month for the last several months of the plan. But we knew that time our plan was confirmed we knew it would go up. We paid the car "outside the plan" so in reality we were still paying the same amount of money.
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Originally posted by Thingshappen View Post
Did your confirmed payment change much from the initial calculation that your attorney submitted initially?
(Sorry for lack of paragraph breaks and typos - travelling for business so typing this on my phone)
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Originally posted by notreallyme View PostFor me, the benefit was stopping the interest payments. I am in a 100% plan and the monthly plan payments keep our budget pretty tight, but I was falling behind on interest payments on credit cards and personal loans. As an added benefit, almost 20,000 of debt wasn't submitted. However, this debt will be discharged along with the debt that was submitted. Wasn't counting on this, but it was nice to see after the claims bar date had passed. Also, in a 100% plan, I am able to keep any raises or bonuses I receive over the next five years. In addition, I can keep my tax refunds - but we usually play around with our withholdings so that we are close to $0 on refunds or amount owed. So, over time our budget can loosen up a bit.
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For me, the benefit was stopping the interest payments. I am in a 100% plan and the monthly plan payments keep our budget pretty tight, but I was falling behind on interest payments on credit cards and personal loans. As an added benefit, almost 20,000 of debt wasn't submitted. However, this debt will be discharged along with the debt that was submitted. Wasn't counting on this, but it was nice to see after the claims bar date had passed. Also, in a 100% plan, I am able to keep any raises or bonuses I receive over the next five years. In addition, I can keep my tax refunds - but we usually play around with our withholdings so that we are close to $0 on refunds or amount owed. So, over time our budget can loosen up a bit.
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Originally posted by Thingshappen View PostThat make sense a lot of sense Justbroke. Last question (for today), for someone that is on a 100% plan, what is the main benefit of filing chapter 13 if he or she will paid back everything over 5 years? I guess the stress relief is a non monetary benefit.
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That make sense a lot of sense Justbroke. Last question (for today), for someone that is on a 100% plan, what is the main benefit of filing chapter 13 if he or she will paid back everything over 5 years? I guess the stress relief is a non monetary benefit.
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Originally posted by Thingshappen View PostBy liquidation assets I meant the minimum amount to be paid back to the creditors. So in an hypothetical scenario, a person with $100,000 in savings that want to keep the cash would need to pay back to the creditors ; the higher between $1,666 X 60 or the DMI (plus Atton/Trus fees). Is that a good interpretation of this matter?
To answer your question, yes that's a good example but hopefully that person doesn't have $100,000 in a savings account and has it a retirement account which is protected. A person with $100K in savings should not file bankruptcy.
The problem generally arises from an issue with non-exempt equity typically in major property such as a home. For most bankruptcy folks the exemptions on a home usually make this non-exempt. That is why you don't see this "liquidation test" issue in most bankruptcy cases. It does happen, but not that often that it's a concern of most people. Think of the so-called "liquidation test" just as a second validation of the debtor's minimum commitment in a Chapter 13 bankruptcy. Again, for most people this test yields nothing.
Going back to the original post, no part of this "liquidation test" question has anything to do with selling property in an active bankruptcy. The "liquidation test" just ensures that a debtor is paying a fair amount into a Chapter 13 which is not 100%.
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Originally posted by justbroke View PostI don't know what you mean by "liquidation assets" since there is no liquidation in a Chapter 13. Although the code uses the term "vest" to determine who ultimately has control over an asset, a Chapter 13 demands that the sale of any property of the estate -- whether acquired before or after filing -- be approved by the court and/or Chapter 13 Standing Trustee.
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Originally posted by Thingshappen View PostThe old car, and my 2021 IRS refund is going to be included in the "liquidation assets", which means that they will be paid back to the creditors over 60 months. Dont they become "vested" back to me?
Originally posted by Thingshappen View PostFor an instance, since my 2021 refunds is being accounted for now, I get to keep it. So, do I need to spend it or can I just keep it in my savings accounts for an emergency? I dont want to end up in a situation where the trustee will look at my bank account a year from now and see my refund and take it.
So, there is some black magic that's done at the start of the case to determine the "minimum" that you must pay the unsecured creditors in a Chapter 13. They use a hypothetical Chapter 7 to determine one baseline (the "best interest of creditors test") and also use your DMI to come up with the minimum. Once that's established, then your plan payments are determined (trustee fee, attorney fees in plan, disposable monthly income).
I have never read where any Chapter 13 Trustee looked at someone's bank account in a confirmed plan. The plan is the plan and so long as you adhere to the plan the Chapter 13 Trustee is not going to bother you.
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Hello guys. I hope you all had a great holiday weekend. Thanks for responding to my question. Here is a follow up one though.
The old car, and my 2021 IRS refund is going to be included in the "liquidation assets", which means that they will be paid back to the creditors over 60 months. Dont they become "vested" back to me? For an instance, since my 2021 refunds is being accounted for now, I get to keep it. So, do I need to spend it or can I just keep it in my savings accounts for an emergency? I dont want to end up in a situation where the trustee will look at my bank account a year from now and see my refund and take it. I know I will need to ask these questions to my attorney but getting your experienced feedback help me ask the right questions to him. Have a great day everyone!
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Originally posted by Thingshappen View PostHello. I am including an old car in my chapter 13 BK petition. The value of the car is about $2,000 and it is paid off. Would I be able to sell it after the payment plan has been approved by court? Do the UST needs to approve such sale? Do I keep the money and save it or is the UST going to want it? Could I even give my car to my son? thanks!
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Generally selling property while in an active Chapter 13 requires approval by the Standing Trustee (the Chapter 13 Standing Trustee). Although the restriction generally applies to all property, it is usually more strictly enforced for the sale of real property (a home), a vehicle (car, boat, truck, etc), or other significant property (land, coin collection, etc). I can't say whether simply properly exempting the equity in the original filing is sufficient. That is why it's a question for a local attorney. There are some really interesting legal questions surrounding whether property vested back to the debtor, after confirmation, is subject to the control of the bankruptcy trustee. Hence the legal question.
The United States Trustee (UST) doesn't deal with case administration so any request goes to the court and the Chapter 13 (Standing) Trustee. As far as I know, this always reuqires that a motion be submitted to the court for approval (e.g. a motion to sell property ... and perhaps to keep the proceeds as well).
In a Chapter 13, you cannot transfer property to another person (give it to your son/daughter/friend/etc) without permission. You must still seek permission to transfer the property just as if you would if it were a sale. Some Chapter 13 Trustees (and Districts) may be easier to deal with than others.
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You will need to ask your attorney. We junked a car during our BK, but the amount was minimal. I don't know if you can give it away, but you might be able to sell it for a nominal amount, but still I would get your attorney's advice. There are variables if you are paying back 100% or less. In our case we paid back 100% so we didn't have to worry much about any monetary windfalls. We had one that was around $800 and the attorney thought that was "nothing," but to us it was a lot of money when you are paying such a large amount of your take home pay!
Not to be too redundant, but it's always best to check with your attorney to make sure you are doing what's right in your state and your attorney should have an idea of how your trustee reacts to things like this. There might be a conflict since you are including it and then turning around and getting rid of it.
We had a car that we were still paying on and it was driven by our adult daughter they allowed us to keep it even though we had three cars, two car loans at that point. That was talked about at the 341 meeting. Is your son still living at home or in college where you are helping them with some expenses? Just wondering if it would be feasible to just do it now, but my daughter was already driving the car we bought it with the intent for her to use it to commute to college and back home, she lived with us.
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Old car included in the petition
Hello. I am including an old car in my chapter 13 BK petition. The value of the car is about $2,000 and it is paid off. Would I be able to sell it after the payment plan has been approved by court? Do the UST needs to approve such sale? Do I keep the money and save it or is the UST going to want it? Could I even give my car to my son? thanks!Tags: None
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