Finding The Commpressed Value Of My Car Before Filing Ch 13

[sahara2k]

I have a brand new vehicle and its become to expensive and I'm going to have to file Ch 13. Should I buy a cheaper car(I'm WAY upside down on this one) or keep the car and put it in the Ch 13? I looking for how they determine the compressed value of a vehicle? Can anyone help me?

[Flamingo]

Since your vehicle is new and newly financed you will not be able to "cram" it into your Plan. If you want to keep this vehicle you will probably have to pay for it outside of your Plan at the monthly payment you are paying now.

[sahara2k]

but....

What do I do if I can't afford that new car. Do I have to give it back in the CH 13? I want to make sure I have a car to get back in forth to work.

[Flamingo]

What do I do if I can't afford that new car. Do I have to give it back in the CH 13? I want to make sure I have a car to get back in forth to work.

I am assuming you have not yet spoken with a BK attorney. Are you late on car payments at the moment. If not and you are just looking into what you can do, you already know you are upside down on this new vehicle and selling it will put you at a loss. Therefore, to obtain another car you will have to deal with that loss and purchasing another vehicle. Without speaking with a BK attorney to view your entire situation and your present car situation and payment, how do you know you won't be able to keep your present vehicle? Instead of guessing what to do, I highly suggest you call and make a few BK consultation appointments and see what your options are and what you can and cannot do. Otherwise you will be playing guessing games and maybe doing the wrong thing. Best of luck to you!

[sahara2k]

Your right...

I'm just ashamed to go to those appointments. I was trying to research as much as I could. Thank you for you help.


My car cost 670.00 a month. I owe 44K its worth about 34K. I need to get my life back under control. I have another car that I co-signed for and I'm sure that will have to go back too. I make really good money but I have a second home that's adjusting and I can't refi, so I'm going to lose it. [I've called everyone to refi it, but I'm upside down on it too, and the payments going up 1000.00/month. I have about 50k in c.c.'s. It's just gotten out of control. I haven't miss one payment, but I've reached my breaken point, and I can't make the payments anymore. I just need help...

[becky20]

Since the loan isn't 910 days old, you can't cram it down, but I agree that I would hold off on doing ANYTHING until you talk to some attorneys. That expensive car payment may help you with the means test. And if you end up in a 13, having that car payment may just reduce theh amount of money that unsecured creditors get - so getting rid of it for a less expensive car may not give you any more money in your pocket, just more for the unsecured...

[Flamingo]

I'm just ashamed to go to those appointments. I was trying to research as much as I could. Thank you for you help.


My car cost 670.00 a month. I owe 44K its worth about 34K. I need to get my life back under control. I have another car that I co-signed for and I'm sure that will have to go back too. I make really good money but I have a second home that's adjusting and I can't refi, so I'm going to lose it. [I've called everyone to refi it, but I'm upside down on it too, and the payments going up 1000.00/month. I have about 50k in c.c.'s. It's just gotten out of control. I haven't miss one payment, but I've reached my breaken point, and I can't make the payments anymore. I just need help...

You have NOTHING to be ashamed about - to protect yourself and to get the correct information you need for yourself and in the state in which you reside, Monday morning call and get a few BK consultations arranged. If you are undecided as to an attorney and don't know where to start, I suggest you call your State Bar Association (look in your phone book under your "State" section which is separate in the white pages). Call and ask for some references in your area for BK attorneys. Your situation will not go away on it's own - you have to actually do something about it yourself. Your first important step is to get informatoin from an attorney as to your specific situation. Best of luck to you!

[BKParalegal]

Getting back to the car issue, it is not just the 910 days that allows or prevents you from "cramming" down on a vehicle. If the vehicle was purchased for use as a business vehicle (i,e. you are a real estate agent or self-employed and need a vechile to visit clients etc.) then the 910 days doesn't apply. Also, if anything in addition to the vehicle was financed in the loan (this is called NON-PMSI or Non Purchase Money Security Interest) like a warranty, the deficiency on a trade-in, gap insurance, anything, then the loan does not fall under the 910 day rule and can be crammed. I do it all the time, all day long.

Good Luck

[Flamingo]

Getting back to the car issue, it is not just the 910 days that allows or prevents you from "cramming" down on a vehicle. If the vehicle was purchased for use as a business vehicle (i,e. you are a real estate agent or self-employed and need a vechile to visit clients etc.) then the 910 days doesn't apply. Also, if anything in addition to the vehicle was financed in the loan (this is called NON-PMSI or Non Purchase Money Security Interest) like a warranty, the deficiency on a trade-in, gap insurance, anything, then the loan does not fall under the 910 day rule and can be crammed. I do it all the time, all day long.

Good Luck

Do you work for a lawfirm or a Paralegal BK filing service? I was advised that under the 910 rule, if there was non-PMSI in the loan, that only the non-PMSI portion could be crammed and not the vehicle portion. You state above, or maybe that is my impression, that the entire loan would then not fall under the 910 day rule and can be crammed prior to 910 days. In any event, when one has a consultation and presents the car loan information, the attorney finds out if anything else is included in that loan and works with it accordingly. For most people, they are just dealing with the vehicle in the loan only.

[BKParalegal]

Do you work for a lawfirm or a Paralegal BK filing service?

Exactly how does working for a Law Firm or a Paralegal BK filing service determine my knowledge in regards to cramming down on a vehicle?

Are you an attorney specializing in BK or someone that just went through BK and read a couple of how-to's?

[Flamingo]

Exactly how does working for a Law Firm or a Paralegal BK filing service determine my knowledge in regards to cramming down on a vehicle?

Are you an attorney specializing in BK or someone that just went through BK and read a couple of how-to's?

You mentioned in your posting that you do this on a daily basis (cramming vehicles in BK)....just a question - nothing more, so if you do that daily, you must work for a service or a law firm. If you don't want anyone to ask questions, don't post what you do....I am not an attorney and I am not just someone who went through a BK either and read a couple of how to's either.

[HHM]

It is my understanding as well, that you can only cram down that part of the loan that is not PMSI if your within the 910 day rule.

But I suppose there could be different rulings in different circuits on this issue.

[BKParalegal]

For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day preceding the date of filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor…

See Lamie v. U.S. Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 1030 (2004); United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241-42, 109 S.Ct. 1026, 1030-31 (1989); United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.1998) (en banc)

The position taken is that on none of those occasions is the word modified by language such as “to the extent” or “portion of.” Therefore the 910 days applies to only if the "debt" and it is understood as the total sum of the debt, not a portion of, is secured by the vehicle. So if any portion of the "secured" debt is attached to any non-pmsi, than the 910 day rule does not apply. Stating that the cramdown then can only reduce the non-pmsi portion pf the debt, effectively negates any payments the debtor has paid toward the loan of the vehicle. Essentially stating that all the payments went to paying the NON-PMSI first then toward the equity of the vehicle. That argument does not stand, since payments were reducing the loan in total. So, in short, the cram down does not just apply to the Non-PMSI portion of the debt.

Good Luck

[sahara2k]

So is it better to just give the car back and file it in the BK? Sorry I'm kind've confused about this process.

[BigJohn]

BKParalegal, if I understand you right, the 910 rule applies to 100% secured debts that is backed by collatoral. But if the debt ha some items that are not secured, such as car maintenance, etc., then the 910 rule does not apply. I s this right? It sounds like it might be right to me.

As for the original poster, her car is new and has all the whistles and bells. The secured part is the car but the whistles and bells are not secured. Which, if I am understanding you right, a secured loan commingled with a unsecured loan makes the loan not covered by the 910 rule which means the loan can be reduced in size. Is that right?

And if I read right, if the vehicle is used for business, the 910 rule does not apply. Is that right?

If this is true, this is fantastic information!