Chap 13 and Car

[dscurlock]

hopefully in the next couple months, we will be filing Chap 13..
personally, i do not have a problem with our 2006 car, owe $13,000 - but my wife wants a new car before we file...and I cant say we would get a better deal with her score, so if it looked at a $20,000 car, then $10,000 off the car now will roll into the new car which would then be $30,000, would i be wrong to say if we put the car in BK that our payment would be quite a bit higher then it would be if the $13,000 car was put into BK?

as long as my wife can get something new out of it, then she will try, she does not seem to care about our financial well being... she does not realize when she doesnt care about her, then she does not care about me, as it affects both of us when she makes dumb decisions such as buying a new car every 2 years...

like i said, im ok with the 2006 car, we live 5 miles from work, and we just got the car last year, now she is wanting to trade it in for a new car, i just dont know how it will affect our chap 13...

[stljohn]

Long time lurker 1st time poster.

I can't offer you anything on whether or not but if you choose to buy a car check the loan documents very closely for the default clause (particularly if you get the loan from GM/Ford/Chrysler).

They often put a clause in there that says you are in default on your loan if you file bankruptcy.

[dscurlock]

Long time lurker 1st time poster.

I can't offer you anything on whether or not but if you choose to buy a car check the loan documents very closely for the default clause (particularly if you get the loan from GM/Ford/Chrysler).

They often put a clause in there that says you are in default on your loan if you file bankruptcy.

higher laws normally win, chapter 13 would over-write whatever they have in their contracts, as chap 13 is BK protection, this is what stops them from taking your car...

[lrprn]

... my wife wants a new car before we file...

This is the time to JUST SAY NO!

And if this is your wife's idea of how to operate as you head into a Ch 13, then dscurlock, you have some serious financial troubles coming your way over the next five years on a tight Ch 13 budget.

[CindyLou]

putting 10,000 negative equity into a car right before BK would be insane! I don't usually say things like that on here but I couldn't even think of a nice way to say that. I think a trustee would look at that and say the same thing and be very questionable about the motive in this case. I also wonder if any dealership would even roll 10,000 negative equity into a loan (do they actaully do that?) that's more 125% LTV???????

So let me make sure I understand. You owe 13,000 on a car that's worth 3,000 and she wants to roll 10,000 negative equity into a 20,000 car resulting in a 30,000 loan just prior to a chapter 13 BK that is designed to get you out of a financial hole? If that is the case I would THINK TWICE before filing! Once you file you can't turn back and it doesn't sound like for a second she if ready! It sounds like she needs somes serious face to face time to determine if she understands the serious of the situation and how selfish (sorry for my directness) she is being. You seem very sincere in your efforts and it angers me to see that she is taking this very lightly. Put your foot down and make sure this does not happen. Just curious, Are you in a community property state? I am sorry that you are going through this and hopefully you can help her to understand how her actions will affect your financial future!

[HHM]

Even with a new car, and incentives (which have dried up to some degree), trying to roll $10K onto a $20K new car purchase is probably not going to happen. That is 150% LTV, no dealership is going to go for that. (never mind tax, title, registration, and fees). About the max any dealer will do on a NEW CAR is 125% LTV and that assumes near perfect credit, your trade-in has some value, and the manufacturer has significant back-end dealer incentives. To get to 125% LTV with $10K negative equity, you would need to buy a $40,000 car, but I am guessing you could not afford the payment; and when you get into that level of car, there tend not to be incentives or special financing, so the dealer probably would not even do a 125% LTV deal anyway.

[woeisme]

There are limits to how high your car payment can be in CH 13, check those out for your area and see if you could even swing the car payments assuming they were included in a CH 13. My guess is no, payments on a 30K loan would just be too high, and not allowable. My opinion is why spend money on a basically "disposable" item like a car, something that loses value from the day you buy it. You'd be a lot better off spending that kind of money on something that actually appreciates in value, and go cheaper on the transportation costs. But that's just a personal bias I have against expensive cars. The real question is whether or not your wife is ready to live for 5 years under Chapter 13 restrictions to her spending. The fact that she's already trying to "game" the system by loading up on more debt before filing shows she doesn't understand that the laws have changed, the bankruptcy process is a very consumer unfriendly things these days, and unless she's ready to start scrimping and saving, you can't expect to get through a CH 13 plan for 60 months. I worry about my husband and our CH 13 for the same reason, he doesn't seem to take it seriously enough, thinks we'll have all kinds of extra cash to fritter away now that we're "only" paying $1100 to the trustee a month instead of $1800 to the credit cards, but hasn't seemed to get that the only way we were able to pay those $1800 credit card payments per month was because we were buying groceries and gas and other necessitities on the credit cards so we were digging deeper and deeper each month. We just made our 1st payment this past week, and I think when he sees that the "extra" $700 never materializes, he'll start being more realistic, but so far haven't had much luck explaining it to him that CH 13 is going to be hard. Wishing you all the luck in the world!

[chpxiii]

as long as my wife can get something new out of it, then she will try, she does not seem to care about our financial well being... she does not realize when she doesnt care about her, then she does not care about me, as it affects both of us when she makes dumb decisions such as buying a new car every 2 years...

Sounds like you and your wife have far greater issues to worry about than a new car.

[dscurlock]

putting 10,000 negative equity into a car right before BK would be insane! I don't usually say things like that on here but I couldn't even think of a nice way to say that. I think a trustee would look at that and say the same thing and be very questionable about the motive in this case. I also wonder if any dealership would even roll 10,000 negative equity into a loan (do they actaully do that?) that's more 125% LTV???????

So let me make sure I understand. You owe 13,000 on a car that's worth 3,000 and she wants to roll 10,000 negative equity into a 20,000 car resulting in a 30,000 loan just prior to a chapter 13 BK that is designed to get you out of a financial hole? If that is the case I would THINK TWICE before filing! Once you file you can't turn back and it doesn't sound like for a second she if ready! It sounds like she needs somes serious face to face time to determine if she understands the serious of the situation and how selfish (sorry for my directness) she is being. You seem very sincere in your efforts and it angers me to see that she is taking this very lightly. Put your foot down and make sure this does not happen. Just curious, Are you in a community property state? I am sorry that you are going through this and hopefully you can help her to understand how her actions will affect your financial future!

I hear all you guys...

I am sure the car is worth more then $3,000
its a 2006 Aveo with 25,000 miles - we owe $13,000

it would not be uncommon for her to take a car
that is upside down and some pocket money
to the dealership and get a new car...over the
last 10 years, we have done this several times,
maybe thats why we have 2 repos with tradeins and
payments we could not afford.

get this, our monthly payment is $350, she thinks
she is going to trade this upside down car, and
get a payment for $400 - she has no understanding
about a bad credit score, and the dealership would
rip her another one if she went to trade this in...
she has no concept of having a car more then 1-2
years then wanting a new one.

Years ago, I bought a 1995 contour, and just got rid
of it last year when we moved, thats how i feel about
having a car, I have no problem keeping it.

she has no concept of saving what-so-ever, if collection
letters come in, she doesnt care, if it wasnt for me, she
would not take care of any of them.

she has to have a pair of shoes every single week, and
has to have a complete outfit every 2 weeks. I buy
shoes every 6 months, and clothes every year, if i need them.

She just bought a Playstation 2, she just had to have it,
thing is, she isnt much of a game player, neither am I...
we have had it for a week now, shes only played it for 15min
and there it sits....

Every single week I have to hear the story on why she
needs a new car, when i mention chap 13, "oh, we must have a new car before we file..." it is a never ending story...

When we met, i rescued her from multiple payday loan sharks, she always kept her money rolling so she could go to casinos..

yea, we have been in a financial mess for years, mostly because
she doesnt care what she buys or spends money on, and cars is one of those issues...



.

[B12]

I am so sorry you are in this situation dscurlock. It almost sounds as though your wife is the cause of your reason for the BK if you are as responsible as you say when it comes to money.

Maybe it is time to stop the enabling and stop signing new loans with her.

On another post you said she "made you" go to the casino. Is she going to make you sign for a new car loan, also?

Irprn, in my opinion, has the absolute best advice for you when she suggested that you start saying NO.

I truly wish you all the best in handling this situation.

[MajorMike]

I rolled over 11K into a new car from negative equity. Crap one will do it!!!! I did the blank check and VIOLA! It was done. I will have this car til the end of my 13 now.
I wanted to get a new car before heading into BK and my attorney even SUGGESTED it but I didn't do it. He said my payment would be lowered and included in the plan but I didnt feel good about it. BTW there is no limit to payments in a 13. Mine is over $600 a month

[dscurlock]

I am so sorry you are in this situation dscurlock. It almost sounds as though your wife is the cause of your reason for the BK if you are as responsible as you say when it comes to money.

Maybe it is time to stop the enabling and stop signing new loans with her.

On another post you said she "made you" go to the casino. Is she going to make you sign for a new car loan, also?

Irprn, in my opinion, has the absolute best advice for you when she suggested that you start saying NO.

I truly wish you all the best in handling this situation.

She does not need me to sign anything, if she really wanted to put foot to a$$ then she can show up at the dealer, and do it herself...she does not need me to sign for a car for her, and ive been saying no to this point, I feel guilty, but in the end i know whos going to get stiffed ...We are...

[dscurlock]

I rolled over 11K into a new car from negative equity. Crap one will do it!!!! I did the blank check and VIOLA! It was done. I will have this car til the end of my 13 now.
I wanted to get a new car before heading into BK and my attorney even SUGGESTED it but I didn't do it. He said my payment would be lowered and included in the plan but I didnt feel good about it. BTW there is no limit to payments in a 13. Mine is over $600 a month

people will be surprised what finance compaines will roll over.

Im do not see how buying a new car would lower chp 13 payments...If i owe $13k and rolled lets say $8 into a $20k car, well now that $13k loan is now $28k - I would seriously think that would increase your chp 13 payments a good deal.

[CindyLou]

I just thought I remembered cap one saying that they wouldn't finance more than 125% ? MajorMike, you must have gotten a good deal on your car then....maybe even with the negative equity you didn't go over the 125?....but I guess who knows. If they want to make the loan I guess they'll do anything.

[stljohn]

higher laws normally win, chapter 13 would over-write whatever they have in their contracts, as chap 13 is BK protection, this is what stops them from taking your car...

hmm.

BK does protect you from losing your car because you are behind in payments it doesn't give you pass for all conditions you contractually agree to. For example BK won't protect you from Credit Union's Cross Collateralization rules.

But I see you like living on the edge. Good luck to you.