Secured payments that will be paid off within a year of filing.

[Hopeinsight2]

I am filing for ch 7 bankruptcy. My schedule J is in the negative, but my car will be paid off within a year after filing. I know it asks the question " will your financial situation increase or decrease within a year of filing". I will have to put yes. Will this force me into a ch 13? It will be paid off in 7 months after filing. I live in Western Arkansas, and am above median, but I pass the means test since my social security doesn't count.

[justbroke]

I am filing for ch 7 bankruptcy. My schedule J is in the negative, but my car will be paid off within a year after filing. I know it asks the question " will your financial situation increase or decrease within a year of filing". I will have to put yes. Will this force me into a ch 13? It will be paid off in 7 months after filing. I live in Western Arkansas, and am above median, but I pass the means test since my social security doesn't count.

That is a very tough and very legal strategy to deal with. How much does the payment affect your "disposable monthly income" calculation on Schedule J? Are you going to have more than $200 of net disposable income (NDI) each month after the car payment ceases?

Besides, you may have other issues with equity (because of the car and any other property that has equity). (In Arkansas you can use the Federal Exemption scheme which may help with the equity issues.) For those reasons, I think you should find several local attorneys and have a free consult which may help review your options.

[LadyInTheRed]

It depends on how much difference it makes in your disposable income and whether the trustee thinks it is worth objecting to a Chap 7 discharge based on the totality of circumstances. A local bankruptcy attorney can best advise you on what to expect.