wildcard towards vehicle and rest crammed down as unsecured?

[AnnainSWFL]

Sorry, re-posting this in proper place:

I am considering filing CH 13 as possible 0% (I am significantly below AMI and owe no priority debt). I have 9K left on a title loan and car is worth 4K (title loan - car was already paid in full and is the collateral).

Can I use 4K wildcard and basically owe nothing on the car thus converting the remainder to unsecured debt as a cramdown?

I am a substitute teacher and I own no assets. Remainder of debt is 8K in cc's and 2K in medical bills.

[justbroke]

Well, if you're filing a Chapter 13 you can actually--and should--file a motion to value the lien on the vehicle. This would make the title loan worth $4K in secured debt and $5K in unsecured debt. The Chapter 13 would re-amortize the loan to a 3 or 5 year loan at 10.XX% (based on Till Rate). That is the so-called cramdown.

You cannot use an exemption to protect property in which there is a consensual lien; you pledged the property as collateral. Otherwise people would just buy stuff, file bankruptcy, use the exemption, and then never pay.

Technically, most courts don't like a 0% Chapter 13 because it makes no sense unless you're saving a home. Are you saving a home? I think not since you mention the "unused homestead exemption" which is $4K.

So my question becomes, why are you filing a Chapter 13?

[AnnainSWFL]

Because I can't keep up with payments and I filed CH7 less than 8 years ago. No, I have no mortgage.

In any case, if I can't apply the wildcard to the 4K portion that would be secured, my payments would not be significantly lower by the time I add in attorney fees (means-exempt, my plan would be 3 year).

I suppose I could file pro se due to the simplicity of the case (no assets, no priority debt).

[justbroke]

Let's just say the vehicle, at $4,000 value, and at 10.25% (Till) would be $85.48/month over 5 years.

Let's just say the attorney fees are $3,500 remaining over the same 5 years at 0%, which would be $58.33/month.

The real deal is what would be your disposable monthly income based on all the facts (income, allowable expenses, taxes, health insurance, and other "allowable" deductions to that income). That's the only way to come up with what your monthly payment would be. So far it's $85.48+$58.33/month or about $144/month. The Trustee fee on that would be $14/month (10% of $144). The total is now about $158/month.

The $158/month has to be WAY LESS than what you're paying on a title loan that is more than $9K with a $9K balance. Therefore you may actually has disposable monthly income (DMI). Your DMI is going to drive the monthly payment more than anything.

Just to make this even more interesting, is that your other $10K only increase your payment to the Trustee by $166.67/month. In other words, that's $158+$167 (+$16 trustee fee on the $167) or around $340/month in a 100% plan (approximately).

If you file with an attorney they are going to cramdown that $9K (balance) on the title loan to $4K (or less).

That's just my back-of-the-napkin guestimate and is in no way completely or close to accurate. Just plugged in some numbers and took a shot. My numbers are based on a 60-month (5-year plan) even if you do qualify for a 36-month plan you could propose a 60-month plan.

I hope the car is solid, reliable, and doesn't need much work (anticipated or actual). It's a long time to deal with a problematic car in a Chapter 13.