My Situation and Some Questions

[HorseyMom]

Ok, I've posted here before, but out situation has changed a bit.

We (DH & I) tried to get an auto equity loan on our truck, to be able to keep it in ch. 7. We got denied from our bank and CU.

So, we're filing Ch. 13. One big reason is to strip our 2nd mortgage, which we haven't paid in 2 yrs.

Our one car is 22 yrs old and so we wanted to buy another car (used). We purchased the car on Thursday and will have no equity in it. According to the private party value on KBB. Our truck is worth $13k, our exemptions together are $6k (Oregon).

I've already paid the retainer fee to the attorney, but wanted to ask here. How will this work now with having our car payment? When we went to talk to the attorney, we only had the old car (worth MAYBE $800) and our truck. Will we just reaffirm the car loan? I did call and ask the legal assistant about this, but sometimes I wonder if she's a bit...screwy on her answers. I would like a second opinion from you guys.

I have more questions, but don't want to ask them all at once, so it doesn't get confusing.

[LadyInTheRed]

You don't reaffirm debt in Chap 13. Either your car payment will be part of your plan payment and the trustee will make the payments to the lender (this is required in some districts), or you will make the car payment directly to the lender.

Out of curiosity, what did the legal assistant tell you?

[HorseyMom]

See, she told me as long as we don't have any equity in the car it will be protected. And that yes, we will just reaffirm the loan? I have a hard time getting to my attorney directly, but maybe I won't now since we are clients. So, there's no problem with having 3 vehicles? Isn't reaffirming the loan the same as making the payments to lender?

[catleg]

You don't reaffirm, in a chapter 13 secured debt stays in place unless you choose to surrender the property.
In general chapter 13 is designed to let you keep your stuff so long as you make your payments on time. (as specified in the plan).

[LadyInTheRed]

See, she told me as long as we don't have any equity in the car it will be protected.

That's true. If there is no equity, all you have to do is keep current on the loan or included it in the plan. If there is equity that you can't exempt, you can still keep the car in a Chap 13 as long as you pay to unsecured creditors at least an amount that is at least equal to the non exempt value.

You can have 3 vehicles, but you may not be allowed the expenses for all 3.

Now that you have retained the attorney, make an appointment to sit down and have all of your questions answered.