Dismissing our case

[bcvw]

We were not recommended for confirmation at the Meeting of Creditors back in Feb. We did not submit a reasonable budget to support the means test and did not include money for our car payment.

Our attorney suggested we give up our car to make our budget work, but we really need it. We both commute quite a ways to work, and if we could have convinced the trustee to allow us $200 more a month for fuel, we could have been OK.

I am losing my job in a couple of months. If I find work, it will be at maybe 50% of what I am making now. I will also have a 401K loan that will come due and as I don't have a lump sum to pay it, there will be tax ramifications. I have severance through July.

We determined that our best strategy would be to let the trustee dismiss our case and refile after the 6 month period where my severance runs out. That would bring us to Feb '09. In the meantime, I could cure the default on the car (no payments have been made by the trustee while we were awaiting confirmation) from the money the trustee will return to us. By the time we are ready to refile, the 910 day rule will allow us to cramdown the loan to the value of the car. I can probably payoff the taxes due for the 401K loan from the money that would have been collected by the trustee. I will also have new numbers to use for the filing from whatever new job I have by that time.

If we do get hasseled from the creditors, our exposure is only 20% of our pay and that is much less than what the plan payment is now. Right now we are in a 100% plan, by next Feb the unsecureds will be lucky to get 10%.

So much drama right now.

[woeisme]

would the change in circumstance allow you to fil CH 7? If so, that would be really great silver lining. Could you hold off on the job search to make that work? Just a thought...

[sharina]

You say you are at 100% payback. Is that to all parties, including unsecured? iF so, what did they not like about your budget?

[zpbk13]

Please share. I would to know the details as well. What was it that made your plan so unacceptable to the trustee? By the way I'm sorry for all the drama you have going on right now. Boy can I relate to drama!

[bcvw]

We had submitted a budget that was workable for us. However, we did not provide for payment of the car in the plan. The Trustee picked up on this. I went back in and tried to pull something out of the budget to cover the car payment, but because the of commute and rising gas prices (the $4 per gallon gas last year is what pushed us over the edge into BK) I just wasn't comfortable creating a possible budget deficit in the future. I asked for more money for gas on the Means Test, but it didn't fly.

The 100% payback was to unsecureds only. That was what the trustee picked up on, and if he paid the car in the plan, the unsecureds would not get their 100%.


I would love to hold off on the job search for the sake of going for a 7 and my attorney even suggested it. However, my wife's salary just covers the house payment and unemployment is not going to cover other living expenses for long.

[sharina]

Surprised your lawyer let it get that far, then.

We had to pay our cars off in the plan as well and we owed very little on them. We were told it was not an option to do it another way.

[zpbk13]

The first lawyer we talked to told us that we have to pay our car notes outside the plan. We are cramming down one car but she still insists both will be paid outside plan. We will see what the second lawyer has to say when we meet him tomorrow.

[bcvw]

Surprised your lawyer let it get that far, then.

We had to pay our cars off in the plan as well and we owed very little on them. We were told it was not an option to do it another way.

Let me clarify. The job loss was recent, not something I knew going into filing, in fact I was notified the day after our 341 meeting. We've been strategizing since then on what to do and we are up against the 20 day dismissal clock to submit something new. My attorney didn't "let it get this far", he and I have been trying to figure out the best course of action.

And yes, we knew the car had to be paid in the plan. Both of us just missed the additional amount, it's not real apparent in the schedules that it needs to be added in. 20K of principal and interest is a big payment per month. Cramdown would bring that to 11K today. After 10 more months of payments and additional depreciation, the cramdown should be good.