Don't mean to gloat, just happy

[keepmine]

Exactly Cindylynn! A rapidly depreciating automobile ought to be ditched.

[CityGirl]

Because I just got the car last year and bought an extended warranty on it. I want to keep it for the next 5 years. I intended to do that when I got it anyway. I want to pay it off. I can't turn it into a deficientcy unless it's 3 years old or more, I thought.

[keepmine]

You may surrender it in the Chapter 13. You don't need to have it for any length of time. You are confusing that with the 910 days of ownership to try and execute a cramdown.

[CindyLou]

to put it in numbers:
You owe $29,000 (650/mo for 48 more months, right? = 31200....principle + interest)
paying inside the BK you will pay $34320....p+I+trustee%
so for a $19,000 car you will pay $15,320 more than its worth.

if you were to surrender the car they would turn around and sell it for around $17,000....that's what the auction value minus the fee would be. You owe $29,000. That would give you a deficiency balance of around $12,000 which would then beceome unsecured. Because you are only paying 10% to your unsecured creditors you would only pay $1200 of that over the 5 years or $20/month.

your challenge is then figuring out how to secure reliable tranportation. Talk with your attorney and see how your trustee view last minute car loans and leases prior to a 13. If that is something that is not frowned upon in your district then it may be an option for you to do with like a civic or similar.....from what you say your haven't been late on any payments. This is a much debated subject on this site and I think varies from district to district. Some view as planning and if asked to keep outside the BK would be no prob. Some view and fraud and would not be ok. So I would ask your attorney before even entertaining the thought of aquiring a new vehicle.

The other subject you are referrring to is a cram down. Where you have to own a vehicle to a certain period of time (910 days) before they lower the amount you owe to the actual value when they include it in the 13. For example. If you had owned your car for at least 910 days then they would just automatically reduce the amount owed to $19,000 (because thats how much the car is worth) include that in your 13 instead of the $29,000, and call it a day.
Hope those numbers help.

[CityGirl]

I understand what you guys are saying but I want my Ford Escape limited. I'm used to making the payment and I want it.
I love everything about it. I don't want a crap little car that I won't be happy with for the next 5 years of my life. I'd pay 50K for it if I had to. I'm used to the payment, I want the car and I'm not turning it in, only to have to finance another car at a very high interest rate because my credit sucks right now which would put me in a similar situation. I'm paying 7% right now. I have an extended warranty already in case anything goes wrong. Thank you Cindy for breaking that down. You had everything perfect and I totally understand.

[CindyLou]

CG,
I don't want you to think I'm telling you what to do...please don't think that. I just wanted to break it down so you knew exactly what everyone was saying. Everyone totally has to make their own decisions. You are right. It is VERY difficult to get a new vehicle and sometimes keeping the one we have is the best option of a few not good options. You know what's funny. We drive exactly the same car. What year is yours? What color? Mine is the dark grey unlimited... I also have the extended warranty. Got mine right after my BK was discharged. Mine is an 06. It had a $4000 rebate and 0.9% which was the only reason I was able to swing it. I know how you feel about it. I'm planning on keeping mine at least 10 years. No joke.

[CityGirl]

Mine is a 2005 but when I bought it, it had 13K miles last year. It now has 25K miles and it's almost 3 years old so I'd be foolish to get rid of it because yes, I'm keeping it for 5 more years.
It's cranberry color Limited with taupe leather interior, XM radio, Moonroof, loaded.
I love it and I do not want to turn it in! LOL
Cool that we have the same car!
I used to have an Infiniti G35 but it was totalled after a year. I moved from the south so I needed a 4-wheel drive!

[rrockinggramma]

In answer to your original question, if you put the car payment into the plan, you will only be paying principal owed, (your lender can only file a claim for the principal remaining on the car) the interested set by the trustee (in my case 6 percent) and the trustee fee. If you keep the payment outside of the plan, then you would continue making those monthly payments on your own. You need to find out IF your lender would report your on time payments while in the chapter 13 to the credit bureau or will it say IIB/zero balance or Included in Wage Earner Plan or Included in Chapter 13. If they do not report the monthly ontime payments, I would include it in the plan. Find out from your attorney what is the trustee's standard interst rate that he pays out on secured claims. Also, my trustee paid off my vehicle first, before the IRS and before any unsecured creditors got a dime. So, my lein was released by the finance company a long time ago. that is something else to consider also.

[gunsmoke]

Everything went as I wanted. Purchased new vehicle 3 months before fileing.Put it in the plan. Attorney fees in the plan. By the time gmac, the attorney, and the trustee get their cut, 2% to unsecured creditors! I hate unsecured creditors!

update : 0% to unsecured creditors

[CityGirl]

It's set at 7.5o%. I already asked him. I will talk to my finance co. and see what they say. You said I'm only paying principal though? How can that be when I have to pay a trustee fee AND the 7.5%?