Chapter 13 payment plan

[shaylo85]

I haven't filed yet but I plan to within the next couple of months. My question is does the trustee allow you to keep a certain amount of money saved while in a chapter 13? I have around 10k saved and I it is my emergency fund. I really don't want to to touch it but Im wondering if the trustee may try to take it for my unsecured creditors.

Ive noticed on this forum that alot of people have high chapter 13 payments (mostly likely because of high income). I on the other hand make about 30k with a family of 4. I did a budget and with the IRS allowed expenses and I can only afford to pay 200 a month. Is that possible that the trustee will agree to this? I havent heard anyone on here whose payments are low and affordable to them. Any insight would be appreciated.

Oh and just to give some insight to my situation. I qualify for a 7 but I want a 13 so that I can keep my car and have my payments reduced. The only other secured debts I have are a mortgage (which is caught up) and student loans (which are deferred). I have 20k in unsecured debt. I was told by an attorney that my cc would recieve little to nothing in a 7 since I had nothing to liquidate so I assume they would recieve the same in a 13.

[enginegirl]

I hate to be the bearer of bad news, but the trustee will take all of the money whether you are in a 13 or 7.. it is considered and asset of the estate and should be paid bak to your creditors... I do not believe that GA has a large cash exemption.... that said if you save the money while you are in an active 13 then you can keep.....

[shaylo85]

Well thats not all the way true. Under Georgia law 5600 in cash is exempt (including the wild card) under a chapter 7. So that should be true for a 13.

[momofthree]

Filing ch.13 to save a car is a BAD bad bad bad bad idea.

As far as the cash, you could keep the non-exempt amount as long as you pay at least that amount to your unsecured creditors over the term of the plan. IF what shaylo85 states is true (too lazy to double-check the exemption amount myself), and you're not using the wildcard for other assets, then the non-exempt portion would be $4400. Your unsecured creditors would have to receive at least that amount over the plan term ($122/mo on a 36-month term or $73/mo over a 60-month term). Keep in mind that this amount is in addition to any secured debt (car payment), attorney fees, and trustee fees that are included in your plan. A $200 payment is probably not an option for you if you want to keep the cash and include a car payment as well....

My advice: file ch.7.

[shaylo85]

Mom0fthree,

I know it sounds bad, but I've been trying to another cheaper car to replace this car but no one will give me a loan. So I think it would benefit me to keep the car. I wouldn't mind giving up the 4400 to creditors. According to KBB my car is only worth 8k but I owe 21k. My payments of $464 are killing me. If I have to pay 8k for the car, $4500 in attorneys fees, and 10% to the trustee that should have me around $250 a month. Thats worth it in my book.

[bkincv]

I'm here in California and we had over $25k in mother in laws monies that she gave to us to be the "trustee" in case she passes (she has type 2 diabetes) We included a letter stating what it was and our lawyer advised us NOT to move it to another account so as to bring up suspicion. As in your case, I think you are allowed to keep some of the monies but it depends on your state. Talk to your lawyer on how much you can keep but I do think you'll lose probably some of it to creditors but don't quote me on that. Talk to your lawyer or A lawyer that knows the bk laws in your state. I do think most states allow you to keep some portion of the cash you possess. Good luck.

[mom2crazies]

Check your state exemptions. Utah does not have a wildcard and so if you lived here, you would have to forfeit ALL of the 10K to the creditors (either the chapter 13, or 7).

[momofthree]

But then you're stuck with a car payment (disguised as a tt payment) of $250 for the next 5 years, essentially paying $15000 to save the car, not to mention being at the will of the trustee. And if you end up with a pay increase, you may very well end up paying all that debt back anyway. AND, you can probably plan on the auto lender objecting to your valuation.

IF, you stop paying your car payment for a few months (lets say 3 before they repo), that's nearly $1500 + you have $10k in savings, which puts you at $11500 cash. Take $8000 cash and buy a car that is the equivalent of what you have now. Pay your attorney around $1500-$2000 for a ch.7 filing. Spend another $1000 on prepaying car insurance for a year and other necessary expenses. You now have around $1000 cash in an e-fund and a car that is paid off that you can fully exempt using the auto exemption and wildcard/unused homestead. Include your current upside-down car in your ch.7 bk and let them take it. And you get your fresh start while still having a comparable car.

Like I said, DO NOT file a ch.13 for a car. It is NOT worth it!

[lolly78]

Great advice momofthree!

[lillymarlene]

Shaylo, I am more like you. Hopefully my payments will stay around $200 (past 341 but not confirmed yet.) I have a low income, but hope to keep a few things, including my "classic" car, that I finished the payments on a few years ago. I qualified for a 7, but was told by my lawyer that if I wanted to keep my automobile, I would have to "buy it back" from the trustee for $550 per month. Then my state, only allows an automobile exemption of $700, and I'm not even sure how such a thing could keep on running:-) I also am self-employed, supporting myself with my small business.

Well, good luck in whatever you decide.

[shaylo85]

Momofthree,

That sounds good. But in Georgia the exemption for a car is 3500 and 600 wild card. Not so sure I can use unused homestead exemption on a car, but who knows. Im already 2 months behind on my car, Im expecting a large refund this year and probably next year. My situation just gets worse and worse.

[momofthree]

Momofthree,

That sounds good. But in Georgia the exemption for a car is 3500 and 600 wild card. Not so sure I can use unused homestead exemption on a car, but who knows. Im already 2 months behind on my car, Im expecting a large refund this year and probably next year. My situation just gets worse and worse.

If you can use the unused homestead of $5000 to exempt cash, then you can certainly use it to exempt a car. You stated above (and I did finally take the time to double check), that the wildcard is basically $5600 ($600 wildcard + $5000 unused homestead), and you were correct. You would use the $3500 auto + $4500 of the unused homestead to exempt the $8000 vehicle.

[shaylo85]

Thanks, I really appreciate you taking out the time to offer the advice.

[daleintampa]

OH Man, If you have cash. Take it out of the Bank and Hide it. The last thing you should do is give away your cash. Cash is King. Do a chapter 7 and get rid of that car and by a car cash for about $3,000.
Or send the Cash to me, I'll put in my Safe for you !

[mom2crazies]

If you take the cash out in a lump sum. Make sure you can account for it (like prepaying as many expenses as possible). Unless you already filed, I don't think they can touch it after that.

I wouldn't reaffirm on the car. I know that our attorney told us that once it goes to auction, the trustee does have to give you back the exemption amount (I'm not sure if that works with Wild Cards', though). Get yourself a car paid for in CASH and enjoy one less payment as you rebuild your life. Being that far upside down is too scary to reaffirm if you get in another bad situation (and your bankruptcy option will be no longer available)