Finally started!

[Andyman]

Got the first of the paperwork from the BK court. Meeting of the creditors is January 8th at 11am. I think the only creditor that will show is the Credit Union where I have my truck loan. My other debts are two cc's to a tune of about $18K and an equipment lease of about $2500 to which I have returned the equipment. I'm really hoping that my payment will be around $300 a month. My current truck payment is $255 and then my attorney charges me $3K. I meet with him this afternoon to go over everything. He's suggesting that we try for a 36 month plan which will make my payments about $350 which I could probably afford.

One thing I forgot to ask his was, will my payment include the interest that I was paying on my truck payments or does the Credit Union just get paid bak on what the actual principle is?

Being self employed, I'm a little concerned on how my payment will be figured. I gross about $6K a month, have business expenses of about $4800 so I pay myself about $1200/month. Once I deduct my basic living expenses I have just enough left over to make the $350 plan payment....I'm really hoping that's what will happen.

[justbroke]

One thing I forgot to ask his was, will my payment include the interest that I was paying on my truck payments or does the Credit Union just get paid bak on what the actual principle is?

When did you buy the truck? The lender (CU) will get interest at either the contract rate or the Till rate.

The Till rate is based on a famous case. You basically pay the prime rate plus 1-3%. Generally, that means 6% to 8% payback on secured claims which require interest. Most use Till plus 2%, so that's 7%.

[Andyman]

When did you buy the truck? The lender (CU) will get interest at either the contract rate or the Till rate.

The Till rate is based on a famous case. You basically pay the prime rate plus 1-3%. Generally, that means 6% to 8% payback on secured claims which require interest. Most use Till plus 2%, so that's 7%.

I bought the truck about two years ago with an interest rate of 7%. I owe about $9700 on it.

[justbroke]

I bought the truck about two years ago with an interest rate of 7%. I owe about $9700 on it.

That is what they call a 910-vehicle. (It's part of the Bankruptcy code which states that if you purchased a vehicle less than 2.5 years (910 days) from filing, then there are certain things you can't do, like something called a cramdown.)

This means that you will continue to pay the contract rate (7%) for the term of your Plan... 36 to 60 months (3 to 5 years).

What's the current retail (market) value? Is it reliable? Still under warranty? Dependable?

I'm asking, because you could be stuck with it for the next 3 to 5 years.

[Andyman]

That is what they call a 910-vehicle. (It's part of the Bankruptcy code which states that if you purchased a vehicle less than 2.5 years (910 days) from filing, then there are certain things you can't do, like something called a cramdown.)

This means that you will continue to pay the contract rate (7%) for the term of your Plan... 36 to 60 months (3 to 5 years).

What's the current retail (market) value? Is it reliable? Still under warranty? Dependable?

I'm asking, because you could be stuck with it for the next 3 to 5 years.

2001 Dodge Dakota with 80K miles. In excellent condition, very reliable. No warranty. Retail value is right at about what I owe...$9700 or so.

[justbroke]

2001 Dodge Dakota with 80K miles. In excellent condition, very reliable. No warranty. Retail value is right at about what I owe...$9700 or so.

Hmmm... maybe not bad... but...

Think about 3 years from now, how will it be holding up? that will be a 10 year old vehicle in 3 years.

Just letting your know that most attorneys will ask a similar question and then tell you to get a new car if you're going into a Chapter 13. The reason is that you want something reliable, and don't want to be strapped with maintenance costs, which you will not be able to afford in a Chapter 13.

I'm just putting this out there... you may want to consider getting a new(er) car before entering into a Chapter 13.

[Andyman]

Hmmm... maybe not bad... but...

Think about 3 years from now, how will it be holding up? that will be a 10 year old vehicle in 3 years.

Just letting your know that most attorneys will ask a similar question and then tell you to get a new car if you're going into a Chapter 13. The reason is that you want something reliable, and don't want to be strapped with maintenance costs, which you will not be able to afford in a Chapter 13.

I'm just putting this out there... you may want to consider getting a new(er) car before entering into a Chapter 13.

I think I'll have to take the chance that it'll hold up. My credit is shot. After my divorce two years ago, my wife got the house and has been making the payments along with making the payment on the second. She's been late lots of times and with me on the loan, my credit has gone down the tube. Couple that with not having made a cc payment in over two months and with the credit crunch, I doubt I could get loan. I just want out of debt. If I can have the truck payment and my attorney's fees in my plan payment and have it run for 36 or 48 months, then I'd have my truck paid off about a year sooner than if I just kept making the payments outside the plan.

[BigJohn]

I think if you buy a new truck with all the extras such as maintenance etc., I think the loan, like has already been mentioned, can be dropped down to about a 607% loan and the extras such as maintenance etc. are dropped from the loan but you still keep the whistles. I hope somebody steps in and corrects me if I am wrong.

[justbroke]

I think if you buy a new truck with all the extras such as maintenance etc., I think the loan, like has already been mentioned, can be dropped down to about a 607% loan and the extras such as maintenance etc. are dropped from the loan but you still keep the whistles. I hope somebody steps in and corrects me if I am wrong.

I hope you really didn't mean 607% (Think you meant 6-7%...)

If you buy a new vehicle (well, get a new loan), then it becomes a so-called 910-vehicle and you can't change the percentage rate. It will have to stay at the contract rate. While the judge could do something, any car finance company will complain that it violates section 1322(a)(5) and can't be valued under the part of the Bankruptcy code which allows valuation (section 506).