Trustee asking for us to surrender cars or pay $300/mo

[forgotten]

Got the trustees recommendation today...

Either surrender both cards or in pay $300/mo more to keep them.

The car payments are $457 and $529. We are currently proposing to pay $1000/mo, all to unsecured.

They say our payments are above what the local court allows. I haven't ever heard of needing to keep a car payment under $350?

How exactly would we obtain credit for new cars with 180 day lates from 20 creditors and a 6 month old ch13 on our credit? Wouldn't anything we get have such high interest that the payments would be nuts anyway?

We are barely getting by as it is, we don't have an additional $350/mo to pay... what the heck do we do now?

Seems dumb to dump the cars we have at 6%APR and 5 year warranties to get an old overpriced car with no warranty that will need lots of repairs (I have a very long commute each day).

[justbroke]

Either surrender both cards or in pay $300/mo more to keep them.

The car payments are $457 and $529. We are currently proposing to pay $1000/mo, all to unsecured.

They say our payments are above what the local court allows. I haven't ever heard of needing to keep a car payment under $350?

You and your attorney should fight. The IRS Allowances are $489 per vehicle. You are, paying too much for the second car. I would offer $40 more a month (difference between the $529 and the $489).

Remember, that's just a recommendation. You can actually get a Plan approved by the Judge over the Trustee's objection!!!

[forgotten]

Wanted to make sure I wasn't crazy.. I thought $489 was the IRS allowance.

I would have no issues at all paying the additional $40/mo, I just can't do $300.

I am still waiting back to hear from the attorney, it was just posted on PACER today, I probably saw it before they did.

[justbroke]

Are you married filing together? Are there at lest 2 licensed drivers in your home? The Trustee may be upset about the 2 cars in general. These are all things you need to work out with your attorney. Some Trustees don't like it when there are 2 cars, but not 2 drivers.

[forgotten]

Are you married filing together? Are there at lest 2 licensed drivers in your home? The Trustee may be upset about the 2 cars in general. These are all things you need to work out with your attorney. Some Trustees don't like it when there are 2 cars, but not 2 drivers.

married, joint filing, 2 cars, 2 drivers, 2 jobs. The fact may be they are "luxury" car brands (purchased used). Perhaps if it was an 89' toyota with the same payment there wouldn't have been an objection.

[justbroke]

married, joint filing, 2 cars, 2 drivers, 2 jobs. The fact may be they are "luxury" car brands (purchased used). Perhaps if it was an 89' toyota with the same payment there wouldn't have been an objection.

Shouldn't matter that they are "luxury". Many Trustees like to object to "something". The fact is, that they are used, and that they are under or just over the IRS Allowance!

[biotechsolution]

..

[forgotten]

Clip of email from lawyer:
Our court uses the budget rather than the Disposable Monthly
Income/Means Test to calculate plan payments. The judges have already ruled on that. Second of all, the $489 per month is ownership expense, which includes payment, insurance and taxes. In Schedule J, we listed those at a total of $1,259. If you subtract the $978 allowance from that, it leaves $281 or not enough difference between the allowance and their request to fight over.

[justbroke]

Clip of email from lawyer:
Our court uses the budget rather than the Disposable Monthly
Income/Means Test to calculate plan payments. The judges have already ruled on that. Second of all, the $489 per month is ownership expense, which includes payment, insurance and taxes. In Schedule J, we listed those at a total of $1,259. If you subtract the $978 allowance from that, it leaves $281 or not enough difference between the allowance and their request to fight over.

Which means they use Schedule I - Schedule J to determine expenses. that's okay.

What I was going to write about earlier, was whether you were including "taxes and insurance" in those $529 and $457 amounts, and I see that you were not! Therefore, the $281 is accurate and not anything to fight over.

The key is that you posted $529 and $457, so my thinking was that it adds up to $986/month (just over the $978 allowance). However, I didn't know that you also put, on Schedule J, your insurance on top of that! The Trustee is right to ask for more.

[forgotten]

Which means they use Schedule I - Schedule J to determine expenses. that's okay.

What I was going to write about earlier, was whether you were including "taxes and insurance" in those $529 and $457 amounts, and I see that you were not! Therefore, the $281 is accurate and not anything to fight over.

The key is that you posted $529 and $457, so my thinking was that it adds up to $986/month (just over the $978 allowance). However, I didn't know that you also put, on Schedule J, your insurance on top of that! The Trustee is right to ask for more.

Got it... didn't realize that amount was with taxes and insurance. Would it even be realistic to try and obtain cheaper cars (considering our credit), or just try and find a way to make the extra payment?

She did offer to fight if I can show I am unable to obtain reasonable financing for a cheaper car. But I assume if we took it that far the judge might decide to question other expenses? Sounds like here if the trustee recommends it the judge pretty much just signs and goes on.

[justbroke]

Got it... didn't realize that amount was with taxes and insurance. Would it even be realistic to try and obtain cheaper cars (considering our credit), or just try and find a way to make the extra payment?

Maybe just get rid of one of the cars? I don't know. The real question is, how upside down are you with these cars? In other words, how much do you owe versus how much they are worth. That's an important decision. Also, it reads as though these cars are quite new. Maybe keeping one and then using 722 Redemption to buy a used one would be good? Ask your attorney about those options.

She did offer to fight if I can show I am unable to obtain reasonable financing for a cheaper car. But I assume if we took it that far the judge might decide to question other expenses? Sounds like here if the trustee recommends it the judge pretty much just signs and goes on.

I probably wouldn't fight on this one. It's pretty cut and dry to me... now that I know of the additional $281 from insurances costs.

[TooMuchCredit]

But on B22C you also are allowed an operational expense in addition to the $489 ownership expense. I thought the taxes and insurance were part of the operational expense not the ownership as the insurance, tax and fuel amounts vary from location to location and the operational expense varies from region/metro area.

Glad I was not in that district!

[justbroke]

But on B22C you also are allowed an operational expense in addition to the $489 ownership expense. I thought the taxes and insurance were part of the operational expense not the ownership as the insurance, tax and fuel amounts vary from location to location and the operational expense varies from region/metro area.

You're right. The operating expense covers fuel, insurance, maintenance, repairs, and registration. That's a separate item on Form B22C. I missed that operating expense covers the insurance, NOT the ownership expense category. (Good catch though!)

Hey forgotten, looks like you need to go back to your attorney and ask why the insurance isn't covered under "operating costs" and not the "ownership allowance"? That according to the IRS Manual (IRM), "operating costs" cover things like insurances, fuel, repairs, maintenance, etc.

[forgotten]

I looked over my schedules... I am claiming $1614 for payments, insurance, gas, and repairs.
$489 per car and the allowed operating expenses of $366 equal $1344. The difference is still $270, which is close to the trustees number.

Thanks for all the clarification, guess I just need to accept the payment.

What about the 6 payments I have already made, will I need to make up the difference on those payments as well?

[justbroke]

Okay, forgotten, we're getting this i pieces, and that's why it's confusing. Above you wrote that you stated that your lawyer's email said "In Schedule J, we listed those at a total of $1,259". With your update... yes, you are over the limit.