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Is it time to file?

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    Is it time to file?

    Here's my situation:

    Home mortgage: 213K
    Student Loan: 122K
    Car Loan: 25K (new car because lease ends in Nov)
    IRS Back Taxes: approx 81K (includes penalties and interest)
    State Back Taxes: approx 19K (includes penalties and interest) - on payment plan of $200.00 monthly
    Unsecured debt: 48K

    Filing 13 because I am over the median in income. I also want to keep my condo and the car so I have a place to live and transportation to work.

    I believe my student loans will go into deferment during the 13 and am aware that interest will continue to occur. I would like to continue to make the payment as it's already low in terms of the total I owe. However I really need to focus on paying off the back taxes.

    Using the last 6 months as the look-back for the income, I think we can come up with a monthly chapter 13 payment that I can manage.

    I was expecting to change from 1099 work (self-employed) to becoming a W2 employee, however the company I interviewed with is taking too long to make a decision.

    IRS already levied my bank account.

    I bought the car because my car lease was ending in Nov. It's starting to look like I may not be able to wait until the end of the year to file because the phone calls are already starting and occur multiple times a day.

    I also need to deal with the back taxes issue because I am up for a federal job and have a security clearance to worry about. If I don't show that I'm making a good faith effort to resolve my financial issue, I could lose the opportunity of a fed job. Bankruptcy is actually looked at as making a good faith effort. They don't like it if you don't do anything.

    My concern is the car. I want to keep it and continue to make payments, however my first payment isn't due until August. I need the car to get to work so I will continue to make payments during the chapter 13. What I'm afraid of is that they will take the car once they get notified I filed especially since I just bought it and haven't made my first payment.

    Will Honda repo if I file bankruptcy in July before my first payment?
    Should I reaffirm this car loan?

    Any advice would be helpful. Sorry for the long post.

    #2
    They would have to file to have the stay lifted in order to repo the car. Since you're planning to retain it and pay, it shouldn't be an issue at all. If you are nervous about it though, you can always show good faith by making a payment now, before you file. Even though the payment isn't due until Aug, they will not reject your payment if you make it sooner.
    Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
    0% payback to unsecured creditors, 56 payments down, 4 to go....

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