should i pay loan secured by car while awaiting confirmation?

[wrenegade]

I have a personal loan with Citifinancial -- total debt of about $15,000 -- and the finance company is holding the title on my 2000 Mazda as collateral on that loan. The loan was not used to purchase the car.
I included the loan in my Ch. 13 filing (I'm pro se) and am attempting a cramdown -- the car is worth $4,800 maximum so I'm claiming in my proposed plan that about $4,800 should be secured and the rest unsecured.
My question is this: should I continue making monthly payments on this personal loan while I am awaiting confirmation? I got a letter from Citifinancial the other day asking me if I wanted to make a "courtesy" payment (the letter specified that they were not in any way trying to collect a debt while I am in bankruptcy).
I have been paying my mortgage payments while awaiting confirmation but wasn't sure if I need to do the same thing here since the car is collateral.
Any help is, as always, much appreciated.

[NoTomatoCan]

Wow. First of all, I think even a letter asking for a "courtesy" payment would constitute a violation of the automatic stay. How can asking for a payment NOT be considered trying to collect a debt?!?

As for your question of whether to continue paying them... why would you? Since you didn't purchase the car with the loan (it is merely collateral and therefore should not be subject to the 910 day rule) it seems that it would be a straight forward cram down.

Not sure what your payment on that $15,000 loan is, but it will almost certainly be more than your payment on a modified $4,800 loan. I would save those funds for something more critical.

[NoTomatoCan]

Sorry - forgot to mention that the loan must also be greater than 1 year old or you might have issues with the cramdown. I assume since you are already planning on attempting the cramdown that you were aware of that.

Just wanted to make sure you were aware of that fact. (It would have ramifications if you decided not to pay Citi and then did not get the cramdown).

[lrprn]

My question is this: should I continue making monthly payments on this personal loan while I am awaiting confirmation?

If you want to keep the car (which I assume you do since you are trying to cram down the value), then since the car is the collateral security for the $15K loan, you need to keep making the $15K payments or Citi could ask the court to lift your stay due to non-payment so they can repossess the car and sell it.

You are taking a huge risk getting suggestions from well-meaning but non-bk lawyer strangers on the internet when you intend to file Ch 13 on your own.

I'm curious.....you don't have to answer if you don't want to....but why are you filing your Ch 13 on your own without a lawyer? Is there is truly no way you can stop making your unsecured payments and pull enough together to retain an experienced Ch 13 lawyer by rolling the remainder of the fee into your plan?

[justbroke]

You have filed Chapter 13 and now have some issues with cramdowns. I can point you in the right direction, but you're in territory that causes many pro se filers issues! I won't say to never file pro se, but the Plan, adequate protection, confirmation, claims management, objections and calendaring for hearings are all things you need to speak fluently.

I have a personal loan with Citifinancial -- total debt of about $15,000 -- and the finance company is holding the title on my 2000 Mazda as collateral on that loan. The loan was not used to purchase the car. I included the loan in my Ch. 13 filing (I'm pro se) and am attempting a cramdown -- the car is worth $4,800 maximum so I'm claiming in my proposed plan that about $4,800 should be secured and the rest unsecured.

Make sure you understand how to do cramdowns in your District. In some Districts, this needs to be done by Adversary Proceeding/Complaint (AP), others as a simple contested matter (Motion), and others by indication on the model plan. Make sure you are doing this right.

Second, some Districts require you to make plan payments on the existing (secured) loan unless and until the claim actually gets valued lower. Your Motion to Value -- or model plan -- would call for a particular value for the car loan.

Third, this does not read as though it's a purchase money loan, so CitiFinancial doesn't have a purchase money security interest (PMSI) in the vehicle. Therefore, it would be subject to the cramdown provisions in 11 USC 506.

My question is this: should I continue making monthly payments on this personal loan while I am awaiting confirmation?

Again, this is where you probably don't understand your local rules and customs. In almost every District, plan payments must be made after filing the petition! In many Districts, these payments must go through the Trustee. In other Districts, adequate protection payments are required (if not making plan payments).

I think lrprn is right. You are probably facing a Motion for Relief from Automatic Stay (MRFS). Do you have PACER? Have you been keeping up with it?

I got a letter from Citifinancial the other day asking me if I wanted to make a "courtesy" payment (the letter specified that they were not in any way trying to collect a debt while I am in bankruptcy).

That was stupid for them to do that.

I have been paying my mortgage payments while awaiting confirmation but wasn't sure if I need to do the same thing here since the car is collateral. Any help is, as always, much appreciated.

Yes, you do need to continue payments.

The Trustee's office can't help you with "legal" questions, but you need to find out the local rules and process for dealing with secure debt that you're keeping. You have issues already.

Does your District use a model plan? Have you written your Plan yet?

[wrenegade]

Thanks guys for the responses. I do have PACER and have been keeping up with it, probably a little too much lately.
This Citifinancial letter looks like it is a form letter they send out for home loans because it calls my loan a "mortgage account" even though its a pesonal loan with my car as collateral.
This is the disclaimer at the top of the letter which I received earlier this week:
"This mortgage account statement is for informational purposes only, as this debt may have been included in a bankruptcy action or may have been discharged. This is not an attempt to collect a debt, recover or offset the mortgage indebtedness against you personally, but our records reflect that we hold a security interest in your property.
In pending Chapter 13 cases, the plan status and terms may not be reflected on this account statement"
It then includes a "voluntary payment coupon" with the total voluntary payment due equal to one month's payment on the loan.
I am in a 100 percent plan, so even though the secured portion is being crammed down Citifinancial is due to be paid their full loan amount, albeit at a lower interest rate for the secured portion.
I do have a Pacer account and have been keeping up with it -- a little too much probably.