Keep a third car?

[Danglin]

I did a search on this type of question, but didn't get an answer that seemed to apply to us, so...

We'll be filing a Chapter 13 in a few weeks, and I have a question about a 3rd car. Oh, and we're in California.

My wife and I each have newer financed vehicles ($325 payment and $383 payment), both of which are upsidedown by a few thousand dollars. We also have a 3rd vehicle, which is free-and-clear and probably worth about $2500-$3000. It has a ton of sentimental value, as it belonged to my late father.

In our upcoming Chapter 13, all of our debt is unsecured: Approximately $120,000 in non-priority income tax (more than 3 years since assessment) and another $120,000 in credit card debt. Based on our estimated payments from the attorney, we'll be paying about $2700 per month into our plan for a total of over $160,000.

Will we be able to keep this 3rd car? Will we need to use an exemption to keep it, or are we okay because of the amount going to unsecured?

[newbie2]

I did a search on this type of question, but didn't get an answer that seemed to apply to us, so...

We'll be filing a Chapter 13 in a few weeks, and I have a question about a 3rd car. Oh, and we're in California.

My wife and I each have newer financed vehicles ($325 payment and $383 payment), both of which are upsidedown by a few thousand dollars. We also have a 3rd vehicle, which is free-and-clear and probably worth about $2500-$3000. It has a ton of sentimental value, as it belonged to my late father.

In our upcoming Chapter 13, all of our debt is unsecured: Approximately $120,000 in non-priority income tax (more than 3 years since assessment) and another $120,000 in credit card debt. Based on our estimated payments from the attorney, we'll be paying about $2700 per month into our plan for a total of over $160,000.

Will we be able to keep this 3rd car? Will we need to use an exemption to keep it, or are we okay because of the amount going to unsecured?

Either way (exemption or money paid in) it sounds like the car is safe.

[momofthree]

You'll use an exemption on it (just the standard auto exemption will cover it since your other 2 vehicles are underwater), but even if it was a non-exempt asset, you'd still be fine since you're paying so much into the plan.

No worries!

[catleg]

How much of that $160k is going to unsecured creditors though.

In any case a third car can be fine, especially if it's an old junker (we have a 12 year old 3rd car, didn't even get a mention at anytime during the process).

[Danglin]

Just did the NADA value website on the third car, and apparently it's worth about $7500 due to a desirable engine package. I hope THIS won't be a problem.

BTW- Total payments into our 13 will be $160,000, all of it will go to unsecureds, trustee fee, and attorney fee. We're current on the mortgage and other 2 cars, so there is no secured debt to be paid off.

Are we still gonna be okay to keep this car?

[LadyInTheRed]

Just did the NADA value website on the third car, and apparently it's worth about $7500 due to a desirable engine package. I hope THIS won't be a problem.

BTW- Total payments into our 13 will be $160,000, all of it will go to unsecureds, trustee fee, and attorney fee. We're current on the mortgage and other 2 cars, so there is no secured debt to be paid off.

Are we still gonna be okay to keep this car?

Yes. As long as the total value of non-exempt assets does not exceed the total distributed to unsecured creditors, you will be able to keep the non-exempt assets. However, the expenses to operate and maintain the 3rd vehicle probably will not be allowed when calculating your disposable income/trustee payment.

[catleg]

OMG. 160k to unsecureds? Is that after maxxing out your 401k contributions?

[momofthree]

Just did the NADA value website on the third car, and apparently it's worth about $7500 due to a desirable engine package. I hope THIS won't be a problem.

BTW- Total payments into our 13 will be $160,000, all of it will go to unsecureds, trustee fee, and attorney fee. We're current on the mortgage and other 2 cars, so there is no secured debt to be paid off.

Are we still gonna be okay to keep this car?

I don't think taxes count as unsecureds, I could be wrong though...

[Danglin]

I don't think taxes count as unsecureds, I could be wrong though...

Income Taxes are treated as unsecured if they're older than 3 years since assessment. In my case, the last year was 2003.