New - And question about vehicle and expenses

[NewToBk]

Hello,
I've been lurking on this board for quite some time, but this is my first post. I've learned a lot of information here, just from reading other's posts, but I have a situation I just haven't been able to find on any other posts, so I thought I'd make my first one.

My husband and I filed a Chapter 13 in Sept 2008. Due to a reduction in his income, we filed a modification on June 2009 to reduce the payments. The Trustee and our lawyer battled it between themselves and we agreed to a lower amount, that didn't take into account all our expenses, but we felt better having come to an agreement with the Trustee (who is not one of the nice ones I've read that some have), rather than taking our chances with a judge. My husband has a 2005 vehicle that is due to be paid off this month and so our payments are scheduled to go up January 2009.

My vehicle is 10 years old and after having the radiator replaced 2 months ago and other things done to it - for a total of $1,030 in repairs over the last 4 months - we have found out it has a huge transmission problem that will be too much for us to do. We don't have the funds to repair that, especially with the payments going up in January. We went to our lawyer to see if we have any options and he said if I can find a lender that will give me a loan during active bankruptcy, we can file the Motion to Incur Debt and then file to have the payments reduced from the total amount we are paying back. The good news is that I found a lender and have been approved, pending court's approval, for a newer used vehicle. We filed the Motion and submitted the loan approval paperwork, complete with the APR, etc, knowing the judge might not approve that amount, but would give us our limits to find a vehicle within.

Now---for the problem. The Trustee filed an objection. She stated that they show the vehicle as a 2005 -- a typo I found with the last motion, but my lawyer didn't correct. This objection we can easily satisfy by submitting a copy of my vehicle's registation. The second objection she has said that after looking through the paperwork, because of the discrepency of the vehicle information, they are questioning the amount we have listed as the mortgage payments - as she shows our 1st mortgage is way lower than it is. Again, I can show the paperwork to show what our mortgage payments are. The Trustee concluded her objection by asking the court to deny our Motion as that would go against the plan we agreed to last June. My lawyer has me coming in on Tuesday to discuss what our next step should be.

Our original plan was to file the Motion to Incur Debt and then file a Motion to reduce the payment by the amount of the vehicle - the lawyer didn't want to do them at the same time. Now he told me to get all my expense information for the Schedule J and bring that with me on Tuesday. For the last few months I have saved every receipt and every item I have to document expenses and I have them all cataloged in a binder. I know we are on the Trustee's bad side, but I am worried. Can the Trustee's objections prevent us from being approved to get the court's approval to obtain this loan? Can the Trustee go through our expenses list and pick them apart when we filed the Motion to Incur Debt -- not to reduce the payments yet? Will we be better off doing both at the same time? Will the Judge be impatient with us over this, as the Trustee's objection sounds pretty bad to me.

Any thoughts or advice would be greatly appreciated.

[Faust]

Well, if everything you said is correct and on the money, I don't see a problem. I mean, what can he/she object to? Facts are facts.

Just make sure you have all the paper work ready. He/she should not have a good side or bad side, only an analytical side.

[NewToBk]

I guess what my question is would be can the Trustee's objections prevent me from getting court approval to obtain the vehicle loan?

[lrprn]

I guess what my question is would be can the Trustee's objections prevent me from getting court approval to obtain the vehicle loan?

If your trustee's objection can't be worked out by your lawyer *and* the decision goes to your local bk court judge to decide *and* the judge sides with your trustee, then yes, the trustee objection can prevent you from getting a car. But that's a lot of "and's" that have to fall perfectly into place to make that happen.

However, given that you can easily prove the car is not a 2005 car as the trustee states and that the car needs major repairs that you can prove you can't afford, the trustee objection isn't going to reach the judge.

Great work finding a lender that will lend to you during an active 13! Those are more rare than (as my farm-raised granny would say) hen's teeth! Hang in there and let this go through the process. Keep on your lawyer to keep on your trustee to make the objection disappear so you can replace your car.

[NewToBk]

Just thought I would update ---- we went to court over the car last week. The Trustee met with our attorney and the Trustee, after lots of back and forth with our attorney, offered to agree to a $300 a month car note. Our attorney was going for a higher amount, because the budget we originally submitted had a vehicle that is about to be paid off and it shows we have been able to "afford" a higher note. Anyway, our attorney rejected the Trustee's offer, with our consent and we took it to the judge. After LOTS of back and forth and intense questioning and scrutiny over the condition of my troubled vehicle, my mortgage payments, scrutiny over our work hours vs school transportation for my daughter ---- the judge finally issued a ruling in our favor for $390 a month.

That was the good news. The bad news is that we have to submit a new Schedule I & J within 15 days of obtaining a vehicle --- so we'll be doing battle all over again with a Trustee who is VERY annoyed with us at the present time. In court, the Trustee was going over many of the listed expenses and our attorney has told us that he will be looking at every single item very closely, as he is VERY upset the the payments made to his office are not going to be as high as what he was expecting in January --- so he will be looking to get them as close as possible to that amount.

Anyway, we did get a much newer used vehicle and the best part is ---- it is so nice to drive a vehicle that is much more dependable and safe than what I had.

[lrprn]

Anyway, we did get a much newer used vehicle and the best part is ---- it is so nice to drive a vehicle that is much more dependable and safe than what I had.

In the long run having a good, reliable car to drive now is what matters. The rest will unfold as it will. Sounds like your lawyer is doing a great job ensuring you are treated fairly against a tough trustee - that's a golden thing to have in your situation. Hang in there!

[LJoutWest]

May I ask what does one do in a 13 if a car has to be replaced in terms of finding a lender?

[lrprn]

May I ask what does one do in a 13 if a car has to be replaced in terms of finding a lender?

Frankly it's hard to find a lender during an active 13 (not to mention that you need your trustee's permission first to replace the car before you can even start to look for financing).

If the car needs to be replaced because it breaks down (rather than being in an accident with insurance money to buy a replacement), what most 13ers try to do is find the cheapest reliable used car they can for cash. Some borrow from family or friends to get the cash, some are lucky enough to have amassed enough to pay the cash out of their 13 emergency fund.

If cash isn't possible, then filers do best car shopping at smaller, local dealers who are more likely to give you terms that aren't too horrible (although still likely to have APRs in the mid to upper teens or worse). The best option when you have to finance is to find a replacement car that will keep the car payment about the same as the car being replaced so your lawyer won't have to modify your plan.

The market for auto lending during 13s has dried up the last two years with the economic downturn, so now it's harder than ever to find lending for even a basic used car duing an active 13. This is why first having an excellent Ch 13 lawyer who creates a liveable plan in the first place, and then building up an emergency fund as quickly as possible after filing are both so important.

The best option is to go into your 13 with fairly new, well-maintained cars that can make it through the five years to discharge. Then you pray daily that nothing unexpected (like an auto accident) happens.