Cram down/behind on my payments chapt 13

[norwoodguy1]

I am 2 1/2 months behind in my car payment and falling behind on others. i am filling chapter 13. I have a 2005 hyundai values at 5,000 on several web sites..I owe 9700 on it. When I file the chapter 13 how do I handle the past due amount before my payment plan goes into effect. All the literature says I must make the monthly payment due at that time. So do I pay the 360? can i put the past due balance into the plan and pay it over 36 months? I am so confused as to the law..Thank you

[norwoodguy1]

Phila/Eastern district--what forms for chapt 13

I need to know what forms do I need to file initially to file. One web site tells me it the petition,local forms,ss, fee. Do i have to file my creditor list or do I have the 14 days to put it together. This is an emergency filing to prevent a car repo....

[HHM]

I assume you don't have an attorney (mistake number 1 when it comes to chapter 13's). At least you are filing a chapter 13, so you can voluntarily dismiss after things go sideways (hopefully it wont, but most pro se emergency petitions go horribly wrong).

You need the following minimum to file.

1. Petition (1st two pages)
2. Schedule or creditors (secured and unsecured)
3. creditor mailing matrix
4. Credit Counseling certificate.

Generally speaking...can you afford the car? and a chapter 13? Even if you prevent the repo, does it make sense to keep this car?

[norwoodguy1]

Thanks

Yes I am doing it myself, cant afford the 1500 the lawyers want. I can afford the car if they lowered the interest rate but they are unwilling to restructure it. I had a job loss a yr and half which put me behind. I got a better job and am trying to get a stable hold of my bills. The 3yr term would allow me to pay off my bills and stable finacially stable.

[HHM]

Have you owend this car for 910 days? Or more accurately, have you had this loan for 910 days. If not, YOU CANNOT adjust the interest or alter the principle owed. The only thing the chapter 13 will accomplish for you is allow you to make-up the back payments, but you will not be able to modify the underlying terms of the note unless the note is older than 910 days.

The attorney's fees is almost like a qualification to file a chapter 13, if you can't afford to pony-up $1,500, odds are, you will not have a successful chapter 13 (that is just reality, sorry to say).

As to how to do the cram down. The arrears (missed payments) simply become a debt to be paid in yoru chapter 13 plan.

[HHM]

I merged these two threads since their topics were converging.

[norwoodguy1]

Thank You

Yes it is over 910 days. I am doing a cran down which will aloow me to pay off the car and balance my books. If BK is for people having little money I think it is disgraceful that lawyers want to jack up the fees preventing people like me who are struggling to file. This is why i am doing it myself and I will seek Legal aid help to make sure my docs are in good order...Thank you again

[HHM]

So, attorneys should work for free? Just kidding, this is not really a post about that topic.

In any event, for the cram down. The Car payment would be made by the trustee, and the trustee would make the payment. So, in your case (if you are below median, you could do a 36 month plan), the car payment would be $5000 / 36 = 138.80 (plus whatever internal interst rate the trustee allows.
Keep in mind, your monthly payment to the trustee is based off of your Disposible Monthly Income (income minus living expenses). Also, ALL your debts get listed in your chapter 13. If your DMI exceeds the minimal amount necessary to pay the car, then your unsecured creditor will be paid something. If your DMI is not enough to cover the minimum amount required to do the cram down, your case could be dismissed for lack of feasibility.

The catch, if you do not receive a discharge of your chapter 13 (meaning, you don't finish it...less than 40% of chapter 13's go to dicharge), you lose the cram down and the car will most likely be repo'd at that point.

[myhearts07]

HHM, What does this mean ( your case could be dismissed for lack of feasibility?)


Hearts

[BankruptinNC]

Hi Norwoodguy1,

I completely understand your predicament with not being able to pay the attorney's fees upfront, but really needing to file bankruptcy in order to survive. My husband and I filed pro se in January, and just had our 341 mtg yesterday, which went pretty well considering our high stress level (the trustee actually reduced our monthly payment from $1397 to $1300 to "help out with the budget"). As HHM said, pro se filing is difficult, and you have to be willing to invest ALOT of time and energy into paperwork, and more importantly, bankruptcy research. This is NOT an easy task, and if there is any way you can find a bankruptcy attorney in your area who will let you pay the filing fee upfront and include the attorney fee in the plan, I HIGHLY recommend going that route. Again, pro se filing is extremely hard, but it can be done. But I also have to agree with HHM when he asked, is the car really worth filing bankruptcy over? In our case, we filed to save our home, and we struggled for almost a year before deciding to bite the bullet and file bankruptcy. I wish you the best of luck, and I truly hope things work out for you.

[HHM]

HHM, What does this mean ( your case could be dismissed for lack of feasibility?)


Hearts

One of the requirements of a chapter 13 plan is that it actually be workable. Let's take a more obvious example.

Debtor owes $60,000 in priority income tax debt. Since the debt is "priority" it MUST be paid in the chapter 13 plan, in full. Thus, the debtor, minimally, must pay $1,090 per month (tax debt + 10% trustee fee). However, despite the best working over of the budget, the debtor only has $500 per month in disposable income. Since the debtor does not have enough DMI to do what must be done in the chapter 13, the plan is not feasible and will be dismissed. In your case, if you do not, realistically, have enough DMI to pay the crammed down value of your car + the trustee fee over the 36-60 months of your plan, it will be deemed unfeasible and be dismissed.

[BKINAZ]

This thread reminded me of a question of something I still don't get fully. HHM you kinda answered it. But I still don't get it. I don't care if you are WAY off...can you give me an idea of how the process works in determining payment?

Again..we have $70k CC debt, $88k second (secured), $200k land (not secured...but is by the land itself), $250 per month on a car we are keeping, $2,600 house payment we are keeping despite your objections. ;)

So pretend you are my trustee...what are my payments based on only those debts.

BKNC "Proposed plan $1397/mth for 60 mths
341 mtg 2/23/2009 ~ Trustee decreased pymt to $1300/mth

BKNC...can you separate how you came up with the $1,397 in general terms?

HHM "So, attorneys should work for free? Just kidding, this is not really a post about that topic.

I know you get Norwoods point ,and I get yours...but on a side note...it seems like the attorney should be paid x-amount first (by the bk) if a client can't pay up front? I mean it sucks if a person can't afford to pay and attorney a nominal fee to us...not to them to save the futures. (just a comment...thought)

[HHM]

First and foremost, your payment is based on your income minus your expenses. Since all you have are general unsecured creditors and non-priority secured creditors, there is no minimum you "must" pay. But don't get confused, your actual payment is determined ONLY by your disposable income.

However, in certain circumstances, the type of debt you have or the liquidation value of your estate can dictate a certain amount of money that must be paid into the plan. If your DMI can cover that amount, your fine, if not, then you have an unfeasible plan.

[BKINAZ]

That actually clears it up...HAVE TO PAY debt would fall into the back taxes, student loans and child support types of things...correct?

[HHM]

That actually clears it up...HAVE TO PAY debt would fall into the back taxes, student loans and child support types of things...correct?

Yes, basically (although student loans don't actually fall into the priority category).