Crammed down payments?

[Nicki8875]

I know I am asking a lot of questions and I apprecriate all the responses and help I have been getting!

I have heard people talk about cramming down a car payment to the fair market value. So if my van is worth $8,000 and that is what they tell me to repay, do I repay over the remainder of my loan agreement or do they refigure the payments through the 60 months I am in BK13?

Also, if my disp. income shows negative on the means test does that mean I cant file or how do they do that? I think I may be entering info wrong and really it is about -$85.00.

Thanks again!

[woeisme]

Car payments can only be crammed down if you've owned the vehicle longer than 900+ days (i forget the exact #, but the point is that not every car applies, just older loans). You have to have your attorney file the paperwork to get it crammed down, it doesn't happen automatically, and usually the loan company will wrangle a little over the worth of the vehicle.

If disposable income is neg, makes it harder to file CH 13, you have to show a budget that the trustee will think be do-able. So you have to propose that you actually spend less than means test #'s allow, and the trustee has to believe you.

[StartingOver08]

910 days

[Nicki8875]

Yes we have had the van since November 2005 so it would qualify to be crammed down. What is fair market value? Is that retail price, private party or trade in? I looked and it is actually worth less then I thought...trade in is only $4000, retail is $8,000 and private party is about $6200. Im just curious b/c that would determine if I am negative or positive on the means test. Right now my payment is $480 per month. Would I pay the $480 until the crammed down amount was pd off or do they come up with a new monthly amount that I pay and for how long...the remainder of my loan or 60 months? Because all that will play into my means test.

[woeisme]

If it is crammed down, you will pay it inside your BK plan. So you won't be making the $480/month payments anymore, you'd be paying the crammed down amount through the BK payments, so it would probably be for the entire length of your BK, the 60 months I think. But someone else chime in here if I'm wrong, since I didn't do a cram down.

[optimistic1]

Make sure you havent refinanced it, I thought it was the purchased date, but it is actually the last time you financed it. This is what the trustee in my district enforces, although it may be different where you live.

[Nicki8875]

Make sure you havent refinanced it, I thought it was the purchased date, but it is actually the last time you financed it. This is what the trustee in my district enforces, although it may be different where you live.

No this is the original loan on the van from 2005.

[optimistic1]

Then you are good to go, go to kbb.com and enter in the data, and get the private party value at FAIR condition.

This will be the price that is put into your plan at a interest rate that will vary between 6-9%.

The remainder is treated like unsecured.

Based on what you say the means test has given you, and you need to be accurate when you do the means test BTW. Then most likely all of your unsecured creditors will get little to nothing at all.

Yes, you can file with negative DMI, you need to come up with a payment plan, that shows you can live, and yet still pay into the plan. Which, you should be able to, because when you cram down the auto loan, it should free up some money for you to spend on living expenses.

Put it this way, when I do the means test I have negative $500, however, my attorney and I are developing a budget to show that I can pay into a plan. And after being on it for three years, I will qualify for a Chapter 7 again, because I filed in 2004, and when that day comes, and I still have negative DMI based on the means test, we will file a motion to convert to a 7, if it seems advantageous to do so.

[Nicki8875]

Then you are good to go, go to kbb.com and enter in the data, and get the private party value at FAIR condition.

This will be the price that is put into your plan at a interest rate that will vary between 6-9%.

The remainder is treated like unsecured.

Based on what you say the means test has given you, and you need to be accurate when you do the means test BTW. Then most likely all of your unsecured creditors will get little to nothing at all.

Yes, you can file with negative DMI, you need to come up with a payment plan, that shows you can live, and yet still pay into the plan. Which, you should be able to, because when you cram down the auto loan, it should free up some money for you to spend on living expenses.

Put it this way, when I do the means test I have negative $500, however, my attorney and I are developing a budget to show that I can pay into a plan. And after being on it for three years, I will qualify for a Chapter 7 again, because I filed in 2004, and when that day comes, and I still have negative DMI based on the means test, we will file a motion to convert to a 7, if it seems advantageous to do so.

So right now what is your payment to the trustee if your DMI has you negative?

[optimistic1]

The payment, if my plan is a 3 year, which hopefully the State Median doesnt nosedive, will be around $350. And even if it isnt a 3 year plan, it will still be around the same payment because I would increase my living expenses to the max allowable without providing proof.

This will pay.

$2000 in attorneys fees
$890 in trustee fees
$5500 (kbb value of car @ 7.5% interest rate)
$1250 in back IRS taxes
$1000-$2000 to unsecured

All of my expenses are below what the Trustee guidelines are, they are also below the IRS allowances.

Show it just shows that I will be adjusting things, like not going out to eat all that much, and being frugal when food shopping, and buying clothing at the goodwill instead of the mall, etc., etc.

I can handle it, I dont care if I have to buy food boxes from the food bank for three years. I want the $35k in unsecured debt discharged.

Keep in mind that everyones situation is different, your plan payment may vary based on numerous factors.

[Nicki8875]

The payment, if my plan is a 3 year, which hopefully the State Median doesnt nosedive, will be around $350. And even if it isnt a 3 year plan, it will still be around the same payment because I would increase my living expenses to the max allowable without providing proof.

This will pay.

$2000 in attorneys fees
$890 in trustee fees
$5500 (kbb value of car @ 7.5% interest rate)
$1250 in back IRS taxes
$1000-$2000 to unsecured

All of my expenses are below what the Trustee guidelines are, they are also below the IRS allowances.

Show it just shows that I will be adjusting things, like not going out to eat all that much, and being frugal when food shopping, and buying clothing at the goodwill instead of the mall, etc., etc.

I can handle it, I dont care if I have to buy food boxes from the food bank for three years. I want the $35k in unsecured debt discharged.

Keep in mind that everyones situation is different, your plan payment may vary based on numerous factors.

Thanks. Do you have a house payment you pay outside your plan? I have been seeing all these large monthly payments wondering how we would do it but knowing you have $350 gives me hope we may end up with a reasonable payment plan!

[optimistic1]

My house payment is current, and will not be in the plan. I do not owe any arrears on it. Dont fret about peoples large payments, every case is different from one another.

[Nicki8875]

My house payment is current, and will not be in the plan. I do not owe any arrears on it. Dont fret about peoples large payments, every case is different from one another.

Mine is current too. That is one thing I am not willing to lose!!!!