Car is paid off!!

[angel7821]

I was paying my car off outside my plan and I finally paid it off on Friday. I am so happy. The payment was 412.00 per month. i contacted my lawyer to confirm that the trustee would not want that money for the plan and he said I can keep it. It will be so nice to have that extra money every month now.

Things are going very well for me. I am not having any problems thus far in the plan and I hope it continues that way. Year 2 is coming to an end and then I only have one more year to go and I will be finished. I can not wait for that day.

I will continue to build up my savings so I can handle the unexpected things that can and will happen.

[mountanddo]

Wow, that's great! Hard to believe the trustee wouldn't want it since you have a year left. I bet you are thrilled. If you save it all you will have a nice $5000 nest egg to start your new debt free life. Congrats!

[eltaur2000]

Hes is going to want that extra money for sure. My Attorney told me to make sure my car payment lasted the 60 months if not they were going to keep the money anyway. It really does not matter it's part of your DMI and its going to the trustee for sure.

[angel7821]

Hes is going to want that extra money for sure. My Attorney told me to make sure my car payment lasted the 60 months if not they were going to keep the money anyway. It really does not matter it's part of your DMI and its going to the trustee for sure.

The trustee said at the 341 he was not going to want the money and I also confirmed with my lawyer on Friday to make sure the money was mine. The lawyer said to enjoy the extra money I have now that the car payment is done. The only thing I have to do is send in my tax returns to the trustee. At least that is how it works in my district. It may be different in yours.

[eltaur2000]

The trustee said at the 341 he was not going to want the money and I also confirmed with my lawyer on Friday to make sure the money was mine. The lawyer said to enjoy the extra money I have now that the car payment is done. The only thing I have to do is send in my tax returns to the trustee. At least that is how it works in my district. It may be different in yours.

Are you paying 100% ??? Because if your not that does not sound correct? I'm sure youre un secured creditors would want some $$$ if your not at 100%

[LadyInTheRed]

If the payment was supposed to increase, the increase would have been in the plan to start with. The plan probably already took the pay off of the car into account. If that's the case, when calculating DMI for the 60 month plan, the payments that would be made during the plan were averaged over the entire 60 months. If there were 24 payments of $412 remaining, the total car payments during the plan would be $9,888. That would be divided by 60 so that the deduction when calculating DMI is $164.80 per month, not $412. So, instead of stepping up payments when the car is paid off, the plan spread the expense over the life of the plan.

[IamOld]

LadyintheRed is I think as usual 100% correct - your atty AND Trustee wouldn't tell you the same thing and both be wrong...besides, as Lady said, it would have been in the plan to begin with...

In our plan (my spouse's 13) when the cars are paid off...the plan step increases by the same amount. So it's the same $$ out the door, just to a different place.

[eltaur2000]

Because the car is secured why would they spread the total cost of the car by 60 months? This means you will continue to pay the car until the original payment plant will be completed. If it's 72 months then they will continue to pay for the 72 months.

Wouldn't it depend if the car was being paid inside or out side the plan?

If it's in the plan it would be spread out for the 60 pr 36 months like you said. If it's out the plan then you will continue to pay the original terms.

Either way you are loosing the DMI car ownership exemption or or if you have out of the plan it would mean that you have the car payment in her case $412 more in disposable income.

I just don't see how the OP keeps the money. Unless they are paying 100% to un secured debts.

[angel7821]

Thank you LITR for explaining that. There is nothing in my confirmed plan about the payment amount increasing. I just wanted to double check with my lawyer on Friday to make sure I can keep the extra money. It will be nice to have it so close to the holiday season coming up.

[karm43]

Good for you! Hopefully everyone who is in a chap 13 gets a break once in a while. Lady is prob right they figured it in.

[mountanddo]

So she has already been paying the extra expense for the car in her plan and that's why the payment she was paying is hers. I'm sure your plan eltaur is different than hers perhaps different states as well. Either way, I think it's awesome that she gets to keep the money. Chapter 7 is stressful but only for a limited time. If you are in a Chapter 13 you have to live under the scrutiny for 3-5 years. This will make her last year a little bit easier to live through. It's nice to be happy for someone that got a break even if it isn't you

[LadyInTheRed]

Because the car is secured why would they spread the total cost of the car by 60 months? This means you will continue to pay the car until the original payment plant will be completed. If it's 72 months then they will continue to pay for the 72 months.

Wouldn't it depend if the car was being paid inside or out side the plan?

If it's in the plan it would be spread out for the 60 pr 36 months like you said. If it's out the plan then you will continue to pay the original terms.

Either way you are loosing the DMI car ownership exemption or or if you have out of the plan it would mean that you have the car payment in her case $412 more in disposable income.

I just don't see how the OP keeps the money. Unless they are paying 100% to un secured debts.

When a secured debt is being paid "outside the plan" and is going to be paid off during the plan, there are two ways to deal with it. Either the exact monthly payment is deducted as an expense when determining DMI and the plan payment is stepped up in the same amount once the debt is paid off, or the payment is averaged over the 60 month plan so the plan payment stays even. Either way, the amount paid into the plan is the same. While the car was being paid off, the OP probably had to put off some expenses like car or home maintenance, dental care, clothing purchases, entertainment and other things that were allowed in the budget. Maybe she had to cut back on food expenses and hasn't been eating a very healthy diet. Now that the car is paid off, she can finally eat better and spend money on what she's been putting off.

The bottom line is that it was known when the plan was confirmed that the car would be paid off before the end of the plan. Nothing has changed in the debtor's financial situation that was unexpected at the time the plan was confirmed, so there is nothing to justify a modification of the plan. If the plan didn't include a stepped up payment, the debtor now has more money to spend.

[spidge]

Good for you Angel, and I hope it sticks. So far I think we were lucky in a similar manor. My wife does not get paid in the summer for two months and it was averaged into the plan making those months tough, but doable. Also, I had a 401K loan that the trustee new would be paid in full last June and since we are upside down in the plan it was not considered. Of course that made the first 6 months very tough.
So you have one year, 12 payments to go and things are looking up. Stay the course and reap the rewards. CASH is King.