YIKES someone help me Chapter 13 910 ruling

[CarleyJo]

Ok...first off I am thankful I found this forum as I was feeling lost. Out attorney file chapter 13 on Wednesday. Long story short we are upside down in a vehicle in a huge way and even in December went to the bank for help and they literally told us to go to a food pantry, or a shelter but we need to make our payments. I swear on my children regarding that one. Ok fast forward filed chapter 13 called the sob bank and they filed a motion objecting...we are 9 days short of the 910....9 days! I don't know if we will be able to refile, our attorney is not being very good with our options. And I don't know if we give it back if we have to pay the difference...anyone have advice?

Thank you all in advance...I am trying to stay positive....yes I put myself in this mess but when both of us got laid off we were so behind in everything we have been trying to make up the difference since. And obviously that didn't work so we did the 13.

Helpppp

[woeisme]

you can let the vehicle go back, they will sell it, and any difference between what you owe and what they recover for the vehicle becomes an unsecured debt, and gets paid at the same % as your other unsecured debts (credit cards, etc.) Your lawyer (and you) should have really paid attention to the law as far as vehicle cram-downs, but basically I think that ship has sailed. The only way out of it is to dismiss and refile, which the bank could also object to since it'd be clear it was just to avoid paying them. (like you can't serial file and dismiss to avoid foreclosure). But if you don't mind the vehicle going back, that's probably your best option. So what if they get x% of it in the CH 13, it doesn't change your plan or how much you pay into it, just means some $ gets shifted around from a different unsecured creditor to the car loan people.

[CarleyJo]

True....the ship has sailed...and hind sight is 20/20. I had applied to 1011 jobs before finding this one taking a cut of 20k a year in the process. Yes you read that right 1011 jobs..there is none out there. Sure if I had a magic wand I wouldn't have been in this mess! So right now we have 250.00 allocated to the upside down crazy loan...so that means I have to still pay the 250.00 a month on the difference? So in essence paying for a car I don't have?

[justbroke]

As a person who has done a cramdown or two... yep... that ship has sailed. The car needed to be 910-days. Are you sure you counted leap year and any other odd things.

Re-filing may mean filing a voluntary motion to dismiss... and not being able to refile for 180 days (if it gets dismissed with prejudice).

[CarleyJo]

Ok what are my options moving forward? Attorney said we might be able to walk away from it? Without paying? No offense I appreciate the help and comments...but the ship has sailed comment has rubbed me wrong. Obviously we ALL should have been better in planning...its like scolding someone for spending to much money. We all have done that ..hence why we are here. I have NO credit card debt..our only debts are the stupid car loan...and a few medical bills.

[CarleyJo]

Also the reason I don't want to pay on it...is ..I will need another vehicle if this one gets taken back. My husband works crazy hours off and on at different times. We both need to work or we can't make any money as he is only on call been looking for other work as well. So my projected 600 in the plan was including the said car...if I have to pay 250 on a car I don't have then I won't be able to get another car with the courts permission.

[justbroke]

The ship has sailed is a phrase used to convey that it is what it is at that point of making the reference. It is not meant to be pejorative, condescending or punitive. It means that there is nothing you can do about that technical fact. Bankruptcy is a highly technical proceeding and when some technical fact is evident... there's nothing you can do. As to better planning, your lawyer should have noticed this and I don't put any blame on you at all. It is what it is.

So, putting that all aside. Here are some options...

1. Surrender the vehicle. This would involve giving up the vehicle to the lender. The lender will then file a deficiency claim as unsecured debt and you will pay this at whatever percentage you're paying unsecured creditors. If you're in a 100% plan, you're basically paying the entire deficiency back. If you're in a 0% plan... you basically have no loss.
2. Retain the vehicle. Keep it in plan, and pay the vehicles actual balance over the terms of the plan (36 to 60 months)... but you can change the interest rate if it's really high, to the Till Rate (I'd say higher than 6% is too high)
3. Dismiss and refile. You voluntarily dismiss your case. If the Judge so orders with prejudice, you need to wait 180 days to refile. You will also need to pay the filing fee again ($274) and you will probably need to pay your attorney a hefty fee again... especially for your "first day motions"

(My assumption with all of these options, is that you are not confirmed yet.)

These options are what you have in front of you. If I were your attorney, and I'm not, I would look at this as a financial decision. You must take the value of the vehicle without the cramdown and spread it over the 36-60 months. Compare that to refiling. It may be in your best interest... to let the value stand. Your lawyer should be helping you with all of this.

Again, personally, look at it from a financial standpoint. Bankruptcy is a financial and business tool. Your decisions should be calculated (pun intended).

[CarleyJo]

Just broke...thank you. I believe we are a 0% plan....however there is some debts like medical and past taxes we are paying the full amount but it is being spread out. I hope that make sense. So let's pretend I give it back, that would mean that I would pay nothing into the plan..however since we have the $250 built in to that car..does that $250 go away in essence bringing our payment down? I am confused and sorry if I am rambling..just trying to decide if we are going to be paying the $250 even if we don't have the vehicle? He said something like modifying the plan and then our payment would be lower? I have a hard time catching him.

Thanks all...its upsetting that we did this wrong to begin with.

[rrockinggramma]

talk to your attorney about 722 redemption. This option is also available for chapter 13's now. You could refinance the FMV portion of your vehicle and keep it and let your bank (sounds more like a credit union to me) file a claim for the unsecured portion. If you are zero percent, then they will get nothing and you will have your vehicle.

Now the interest is high but only financing the FMV will lower your payment.

It is an option that hasn't been mentioned here.

GL

[justbroke]

Just broke...thank you. I believe we are a 0% plan....however there is some debts like medical and past taxes we are paying the full amount but it is being spread out. I hope that make sense.

Yes, it does!

So let's pretend I give it back, that would mean that I would pay nothing into the plan..however since we have the $250 built in to that car..does that $250 go away in essence bringing our payment down?

It depends. Do you know what your Disposable Monthly Income (DMI) was on Form B22C? Or, if you're under-the-median, what your Schedule J shows for disposable income?

I am confused and sorry if I am rambling..just trying to decide if we are going to be paying the $250 even if we don't have the vehicle? He said something like modifying the plan and then our payment would be lower? I have a hard time catching him.

No, you wouldn't pay the $250, unless... that becomes "disposable income". If your "disposable income" was already negative, then adding the freeing up of that $250 may not make a difference.

(My assumption below is that you're a below-median income debtor)

For example, say you're paying $250 for the car and you're paying it through the Trustee. Let's also say that your disposable monthly income came out to $-300/month. Even if the $250 became available, your monthly disposable income would be $-50. Until that value becomes positive, you wouldn't need to contribute it to the Plan. So, if your plan payment was $250 for the Trustee... it would now be $0 to the Trustee. Do you understand?

Thanks all...its upsetting that we did this wrong to begin with.

Don't blame yourself! If you filed with an attorney, he should have caught that (in my personal opinion)!

[CarleyJo]

Thank you everyone!!! I feel better already...well not really but a little bit. I am worried about finding someone to sell/finance me a car...I know that sounds crazy..but I cannot afford to not have a car nor can I buy a junker since if I had 2000 laying around I would have paid my car payments. Yes unfortunately we are way under median....I really hate that I took a cut in pay but after applying and not getting much response from 1011 jobs I didn't know what else to do. Thank you again everyone...its odd we have a motion to object to the 910 ruling on the 10th of August but first payment is due the 2nd of August so I guess I will be paying on the car for at least one month until this gets straightened out.

Thanks again everyone!!!!!!

[justbroke]

talk to your attorney about 722 redemption. This option is also available for chapter 13's now.

I don't think this works on 910-vehicles. I could be wrong, but 11 USC 506 specifically added that "hanging paragraph" to protect auto lenders. CarleyJo's car is a 910-vehicle (by 9 days).

But let me add, that it does help the problem by allowing the person to surrender the vehicle and purchase a new/used car.

[CarleyJo]

Ok ...just heard from my attorney..via email. So he thinks we should file a motion to dismiss without prejudice and then file a motion for automatic stay? Is there such a thing. What irratates me is in his email he said your car bought in December..I specifically remember telling him jan 13 2007....so obviously my attorney is not a good listener....this is all frustrating!

[justbroke]

Ok ...just heard from my attorney..via email. So he thinks we should file a motion to dismiss without prejudice and then file a motion for automatic stay? Is there such a thing. What irratates me is in his email he said your car bought in December..I specifically remember telling him jan 13 2007....so obviously my attorney is not a good listener....this is all frustrating!

I think he's going to file a Motion to Dismiss Without Prejudice. Then he's going to immediately refile. However, refiling requires something known as "first day motions" in which he must file a "Motion to Extend the Automatic Stay", as the Automatic Stay would cease in 30 days from filing a serial case.

[CarleyJo]

Thank you.....I think I am starting to understand. I did find a case in KS ( I am in MO) where the judge did overturn Chryslyrs objection to the same thing as they said she is just refiling to beat the 910 rule, which the judge basically said of course she is that is what they orginally filed it for. But she was also off about a week or two in the 910 ruling. Its so confusing!!!!