How do you "cram down" a upside down auto loan.

[justbroke]

I just spoke to my attorney and the phone and justbroke you are absolutley correct...

Thank you for your answer.

Yes, they get so used to talking to each other that they know exactly what each other is talking about.

However, when talking in a large public forum, people tend to be picky on word choice. I wasn't trying to single you out, just trying to help you understand the process.

I hope this all makes sense to you now. You have a good lawyer there.

[optimistic1]

First, if you bought the car more than 910 days ago (2.5 years) then

A 36-month plan is $219.35 at 8% interest (Till).

A 60-month plan is $141.93 at 8% interest (Till).

They base it on the $7,000 value. Now, the difference, the $4,000 would be paid as a general unsecured claim. How much you save on this total deal will be based on what percentage you pay to unsecured creditors. Anything less than 100% is, of course, a win for you. If you have a 0% plan... even better.

Otherwise, you'll only get a refinance of the $11,000 so the new payment would be $344.70 for 36 months (at 8%), or $223.04 for 60 months (at 8%)

Do they always have the interest set at 8%?

[justbroke]

Do they always have the interest set at 8%?

That interest rate is based on what we call the Till rate (a case which established interest rates on secured claims).

The Till rate is based on the WSJ Prime Lending Rate and then adds a risk factor between 1% and 3%.

So, when the Prime Lending rate is at 5% (which it had been recently), you would see rates (in Chapter 13 Plans) set between 6% and 8%. The 8% seems to make automobile lenders happy.

You could propose 7% or even 6%.

(Note: the WSJ prime lending rate is now 3.25%. Some Districts set the "rate" for the District monthly or quarterly. However, you can always propose the WSJ rate plus the risk rate. For example, in Kansas, they just add 1.5% (half the range of the risk percentage).)

Your Mielage May Vary. Pun Intended.

[optimistic1]

Interesting, I wonder, would it be beneficial to do the cram down, because by the time I file, I will have about 2 years left, and I should be able to confirm a 36 month plan, with about $100-200 to pay for attorney, trustee fees etc, and basically 0% to unsecured. Then after the 2 years modify my Schedule J and put that added expense (car loan) back into food and such. Or just do the cram down, and move the extra $ around to the same areas, or pay more into the plan. I have like a million questions, i know, but thats what makes this place so great!

[lrprn]

...I should be able to confirm a 36 month plan, with about $100-200 to pay for attorney, trustee fees etc, and basically 0% to unsecured.

Did an experienced Ch 13 bankruptcy lawyer tell you that you would be able to file a 36-month Ch 13 plan?

These days the only Ch 13 filers who are consistently getting a confirmed 36-month plan are those who show zero to less than zero disposable income but are forced to file Ch 13 to try to keep an asset. Do you fit in this category?

[optimistic1]

No, my wife and I need to file a joint Ch. 13, because she cannot file a Ch. 7 alone. If she filed a Ch. 7 alone, I would be sued by the creditors, I live in a community property state. I cant file a joint CH. 7 I filed in 2004.

Our combined incomes are over the state median, that automatically puts us in a Ch. 13 anyway.

And, furthermore, when the baby is born, we would be under the state median income level, which would automatically put us in a 36 month plan, correct?

Does the law specifically state that only people with zero to less than zero DI and have an asset that they want to keep are the only people that can get a CH. 13?

Please look at this flow chart.

http://www.mcdonaldlawaz.com/bkinfo/flowchart.htm

Granted the 36 to 60 month is dictated by the BAPCA State Median Income Levels. Which 9 months from now, we would be under the median, which is a 36 month.

However, I have been talking to attorney, who went over these specifics, and I have a consultation scheduled with him and 4 other BK lawyers.