Car lease payment included in plan - ? on replacing it at lease end

[debtinohio]

I'm waiting on my attorneys response to this same question, but I wanted to see if anyone else had this issue.

@ our 341 the Trustee had issue with our car lease payment of $599 which I was paying outside the plan. I advised we attempted to purchase a new car prior to filing but were unable to secure financing. The Trustee stated perhaps just paying it through now since it so close to the end anyway and getting a car for around $350/month when the term is up and the remainder would go to unsecured (not what I wanted, but whatever).

My attorney modified the plan to go from $1400/month to $2000 a month to now include the car and changed unsecured dividend from 12% to 24% (which tells me another $30k going to unsecured - my lease payment for the remainder of the plan). This is fine, however the lease is up in Dec 2010 and I do not see a provision in the plan to replace it. Is there something else that should have been filed? I cannot afford $2000 + a new car payment when that car is returned.

Thanks in advance.

[justbroke]

You will simply need to work with your attorney. If the car is necessary, then you can replace it. The Trustee is right though, $599/month for a car is $110/month TOO HIGH since the IRS limit is $489/month and that includes the ownership allowance.

[SMinGA]

When it gets closer to the end of the lease you'll need to get permission to seek financing for another car - and it sounds like the trustee is already saying a $350/mo car payment will be allowed. Most likely, at that point the difference of ~$249 will start going into your plan.

[BuckeyeGuy13]

Familiar story to mine. I'm also in Ohio, Southern District to be specific. The plan should have been graduated to show a payment of $2K for months 1-X, then payment of (roughly) $1650 months X - 60. This would account for the new car payment that will be paid outside of the plan. At least, that's what mine did and, again, I'm in the same situation as you.

You'll learn this soon enough, but I'm learning it now as I'm going through the car hunt experience. Yes, you'll get a payment approved of $350 - $400, however, there are restictions you need to keep in mind like cars under 60K miles and, with a 16.99% interest rate, your maximum price will be about $15K or so.

[debtinohio]

Thanks everyone, yeah - $599 is too high. I don't even want the car, there's just nothing I can do right now.

BuckeyeGuy13 - I'm also in the Ohio Southern District. I was thinking the same thing, like a step-down in payments or something. I'll ask my attorney about this, I'd like to ask for $400/month for a car and $200 back to the plan. I guess we'll see :-)

When I asked the Trustee last week he told me it all needed to be accounted for in the plan, yet I don't see it yet.

[BuckeyeGuy13]

Hey, we're two of thousands then! Good to meet you "neighbor." Seriously, as JB mentioned, just get with your attorney to get it straightened out. I know I had multiple conversations and exchanges with my attorney prior to my confirmation to make sure everything was nailed down. While she probably thought I was a PITA, in the end, I'm the one in the plan for the long haul....

[debtinohio]

haha yup!

Yeah, I wrote her about this issue.

Wonder if they let you put $5000 down and then finance the $15K so you can get something newer for around $20K then? I was looking at a 2007-08 mid-size SUV since we have 3 kids and a dog.

My case sucks and I apologize to her for being a PITA all the time. I keep telling her "you should have charged me more, lol"

[BuckeyeGuy13]

Honestly, I'm not sure. I would think if the numbers work out and you hit that payment, then it would.

Here's what I've learned so far through some phone calls to local dealers. There's a maximum rate that the trustee will approve (16.99%) and there's one lender that dealerships will work through (Friendly Finance) that will take active 13's. They will also require 20% down in order to finance. So, in your example, that would work.

Again, I'm in a very similar situation in that I'm looking for an SUV for the same reasons. There are a few out there that can be had at the price, it's all about getting the trustee to approve the deal. I will PM you the dealerships I've contacted that have been helpful.

[debtinohio]

Thanks so much, that's great!