Stuck in a bind on my CH13..

[rbaronex]

Hello all,

I have a recreational vehicle valued at $30k. No lien on this, fully paid. Here's my delima, My folks laid out the money on this, for me, and so far I've paid back $10k out of the $30k. I owe them $20k more. I appraised this to be worh $30k. My attorney threw this entire amount at my 13 plan as "non-exempt assest." I am the only person on the title. This non-exempt item raised my payment plan by $600 per month on a 60 month plan. That is $600.00 per month we don't have. My folks are expecting the balance of
$20k to be paid back. My attorney is telling me, even though we disclose this and pay this back to my unsecured creditors ($80k in CCs), I cannot sell this item to pay back my folks for at least 6 months after the case is confirmed.

Thats the first issue.

My parents also have an issue with this, they are afraid they will lose their $20k. Also, if we have a solid paper trail on where this money came from to purchase this asset, why do I have to pay for this twice? $30k into my plan and $20k back to my parents, WTF? Trustee is getting 10% of this asset, another $3k in his pocket! What type of CH13 laws are we dealing with?

Credit cards have drained me and my family for 30% interest, took everything we own, and now I even have to pay this $30k in my plan toward unsecured, and when I do sell this, $20k to my folks? In the meantime, we are left with a BK13 payment that is $400 dollars more than we can pay due to this fiasco. My parents have evidence they paid for this, now, granted they are not on the title, but no one anticpated the market issues that is leading us to file a 13, I never pushed to get them on the title for something I was anticipating to payoff quickly. I paid them back $10k the first 60 days, then hell broke loose and here we are. I find it hard to believe that a trustee will not see this for what its worth given the paper trail. I live in AZ and have a family of 4.

Appreciate your input.

Thanks,

RB.. Kind of mad-as he%$

By the way, You guys have been great in answering Ch-13 questions for me.

Very helpful and Thanks.

[justbroke]

I cannot sell this item to pay back my folks for at least 6 months after the case is confirmed.

You can sell it anyhow! First, you need permission to sell it, and the Trustee would want the proceeds anyhow.

My parents also have an issue with this, they are afraid they will lose their $20k. Also, if we have a solid paper trail on where this money came from to purchase this asset, why do I have to pay for this twice? $30k into my plan and $20k back to my parents, WTF? Trustee is getting 10% of this asset, another $3k in his pocket! What type of CH13 laws are we dealing with?

They are probably going to lose it. There is no good way out of this. Your parents should have immediately recorded a lien with the division of motor vehicles immediately after they purchased it for you.

Credit cards have drained me and my family for 30% interest, took everything we own, and now I even have to pay this $30k in my plan toward unsecured, and when I do sell this, $20k to my folks?

I don't see you being able to sell this thing at all. The Trustee is going to object and I don't think it's happening. Also, the lawyer was right on one thing. You do need to pay that $500/month over 60 months into the plan to protect the asset. Otherwise, the Trustee will want it in order to liquidate the property and divide it amongst the unsecured creditors.

In the meantime, we are left with a BK13 payment that is $400 dollars more than we can pay due to this fiasco. My parents have evidence they paid for this, now, granted they are not on the title, but no one anticpated the market issues that is leading us to file a 13, I never pushed to get them on the title for something I was anticipating to payoff quickly. I paid them back $10k the first 60 days, then hell broke loose and here we are. I find it hard to believe that a trustee will not see this for what its worth given the paper trail. I live in AZ and have a family of 4.

It is a non-exempt asset. That's what it is. If your family "loaned" you the money, they should have recorded a mortgage or filed a lien and held title to the property. That's how the Trustee sees it. That's how every other person in the legal community will see it.

This is not a good position to be in, but it is what it is. I even though of telling you to dismiss then re-file after the record the lien, but the title issue will still easily be overcome by the Trustee. The Trustee has very far-reach avoidance powers, and they are the only entity I know that can quash liens that weren't recorded within a statutory period provided under non-bankruptcy law... with ease.

I just don't see why your attorney is telling you that you'll be able to sell it. What I also can't believe (well I can) is that your attorney didn't do any "asset protection" review with you! Your attorney should have told you all this up front... or maybe he did and now you're learning that you can't afford the Chatper 13 Plan payment.

Either way... it is what it is. A non-exempt asset worth $30K is exposed.

[rbaronex]

Payed non-exempt to unsecured and cannot sell item?

What would be the use of paying a "non-exempt" item, lets say my RV worth
$30k into the plan to unsecured and afterwards, not have the ability to sell this off? I was under the impression, I have included this into my CH13 plan. My unsecured creditors are recieving the benefits. Why am I not allowed sell this 6 months down the road after plan is confirmed? I could use that money to pay taxes, bill house repairs, who knows what. It should be officially mine, I paid the value of the RV to my unsecured creditors. Why would the trustee ask for the proceeds after I sell this item?

Thanks,

RB

[justbroke]

What would be the use of paying a "non-exempt" item, lets say my RV worth $30k into the plan to unsecured and afterwards, not have the ability to sell this off?

One you actually paid the $30K into the Plan... I wouldn't see the Trustee complaining. However, if you were to ask permission to sell it, which you must, I don't see the Trustee letting you do that before actually paying $30K into the plan for unsecured creditors.

I was under the impression, I have included this into my CH13 plan. My unsecured creditors are recieving the benefits. Why am I not allowed sell this 6 months down the road after plan is confirmed?

More than 40% of all chapter 13 plans fail. Why would the Trustee let you get $30K cash benefit before you are barely 10% into the plan duration? Makes no sense.

I could use that money to pay taxes, bill house repairs, who knows what. It should be officially mine, I paid the value of the RV to my unsecured creditors. Why would the trustee ask for the proceeds after I sell this item?

A Chapter 13 plan doesn't care about those things. Those things should have been factored into your plan.

If you actually have paid that $30K into the plan directly to the unsecured creditors ($5,000K/month for the first 6 months)... sure, it would be "officially" yours.

[rrockinggramma]

your parents need to file a claim for the 20 k you owe them on this RV. Since it is free and clear there would be no deficiency balance owed but your parents need to file a claim in your case for their 20 K. You can pay them off the difference between what they will get from the trustee and what you still owe them after discharge.

[forgotten]

My parents also have an issue with this, they are afraid they will lose their $20k. Also, if we have a solid paper trail on where this money came from to purchase this asset, why do I have to pay for this twice? $30k into my plan and $20k back to my parents, WTF? Trustee is getting 10% of this asset, another $3k in his pocket! What type of CH13 laws are we dealing with?

My parents have evidence they paid for this, now, granted they are not on the title, but no one anticpated the market issues that is leading us to file a 13, I never pushed to get them on the title for something I was anticipating to payoff quickly. I paid them back $10k the first 60 days, then hell broke loose and here we are. I find it hard to believe that a trustee will not see this for what its worth given the paper trail. I live in AZ and have a family of 4.

Unfortionatly since they did not record a lien on the vehicle, they are a general unsecured creditor, and that is an asset of yours.

They can file a claim for the $20k you still owe them and they will be paid the same as any other unsecured creditor (you will need some type of evidence of the loan).

In the eyes of the law you are not paying for it twice - you are paying for it once. You own it free and clear, you can either pay its value in to the plan and that money is distrubuted to your unsecured creditors or it can be sold by the trustee and the proceeds distributed to the creditors.

Any remaining debt to your parents is discharged upon completion on your plan (legally anyway).

[rbaronex]

What happens if item apprciates in the near future?

Hi all,

First off, thanks for all your input and feedback into this issue. I do see the light now and understand how the process works. If I go ahead and wait it out until $30k is paid into the plan, then ask the trustee to sell this item, and the item sells for $45k (for example,) can the trustee sieze that extra $15k?

I am not anticipating that much appreciation, but what if you are able to get more for that later down the road?

Thanks,

RB

[justbroke]

First off, thanks for all your input and feedback into this issue. I do see the light now and understand how the process works. If I go ahead and wait it out until $30k is paid into the plan, then ask the trustee to sell this item, and the item sells for $45k (for example,) can the trustee sieze that extra $15k?

If that $15K represents "disposable income" (above your allowances in your plan), sure... they can take it and split it amongst the unsecured creditors.

I am not anticipating that much appreciation, but what if you are able to get more for that later down the road?

How many unsecured creditors do you have? I think you have $80K in unsecured, so the $20K to your parents would up it to $100K. (I was just thinking out loud.)