First bk13 meeting. Some questions.

[andy158]

Had my first bk13 meeting yesterday. Attorney said I can absolutely not keep any "luxury" vehicles. I have a boat that is 60% paid and two motorcycles 25% paid. If they are surrendered they will certainly get less at auction or bank sale than what I would pay in the Plan over the next five years. The boat is over 910 and will be paid off in 34 months at my current payment. Both motorcycles under 910 and have 52 months left. Could these be crammed down and included in the Plan? I have $103k unsecured and am looking at about a 75% payback. Also I know there will be at least three cc's that will be paid off during the five years(they have low balances). How are those listed in my credit report after bk? Thanx again for this forums input.

[falken]

Without knowing all the numbers, my guess is that you could only keep them if you proposed a 100% payback plan instead of a 75%.

You are not going to be able to keep a boat and motorcycles (well, unless you didn't have cars and used those to get to work) while the unsecured creditors "suffer".

[falken]

[QUOTE=andy158;296377Also I know there will be at least three cc's that will be paid off during the five years(they have low balances). How are those listed in my credit report after bk? Thanx again for this forums input.[/QUOTE]

None of your credit cards will be paid off. If you are in a 75% plan then they will all get about 75% of what they are owed. After you complete the plan and get a discharge the rest of the debt is wiped out. All your credit cards will be listed as a 0 dollar ballance and included in bankruptcy after you file.

[optimistic1]

It's the trustee's job to give to the unsecured as much as they can possibly get. If you are trying to spend money in your budget to go towards luxury vehicles instead of towards unsecureds, it will be frowned upon, and not allowed.


Your credit report will reflect those debts as "discharged in bk13" after you complete your bk.

[justbroke]

There is nothing in the new Bankruptcy Code (BAPCPA of 2005) which prevents a Chapter 13 debtor from keeping all his toys. The problem is... can you afford to keep them.

In order to keep items that are "not necessary for the reorganization of the debtor" -- fancyspeak for things you don't really need -- you must pay at least as much to unsecured creditors, as they would get if your were to liquidate the assets in a Chapter 7. In other words, you'd have to pay a minimum of the value of the "unnecessary" items, in your Plan to unsecured creditors.

For example, say that your disposable monthly income (calculated by Form B22C) is $500/month. Say that you own a boat that you own outright and its value is $30,000. You have no exemptions to cover the boat. In this case, you'd have to pay at least $30,000 to the unsecured creditors. Because your DMI is already $500/month (or $30,000 over 60 months), you would be okay. However, if your DMI was lower, or the "toys" had more value, you would have to contribute more into your Plan to unsecured creditors.

Now, most people can't afford this because they entered Bankruptcy to fix their cash flow problems. This means, that you would have to surrender those items. The Trustee couldn't care less about how much it would "fetch" at auction. The key is that you can't keep your unnecessary items while the unsecured creditors suffer.

Since you're in a 75% plan now you'll need to be in a 100% plan in order to keep all those toys. My simple math shows that you'll need to contribute another $30K over 60 months or approximately $500/month more into your plan. This would make it a 100% plan and will quell any objections to confirmation because of your toys.

You need to decide if you can afford that 100% ($103K) payment to unsecured over 60 months... and if your toys mean that much to you.