What do I say if asked about this loan??

[happy_ira]

I need help with this one, please. My 341 is coming up very soon, and I have a couple last minute questions... I filed on Aug 15 2008 and then filed an Amended petition on Aug 22, 2008. (No change was made by the Trustee/Judge to the 341 hearing date due to the amendment.) Reasons for amendment was as follows:

I completely spaced-out on a car lease that was ending on Aug 18 and I got a call from the dealer on Aug 13 saying "Hey, your lease is up. Are you going to buy the car or terminate the lease?" Well, obviously, my credit rating was shot from all my debt and unpaid bills, so who was going to give me a new lease? No one. However, the dealer said he could push through a loan with 'BigBank' Auto Finance because I had been a loyal customer over the years with the car dealership. Fine, let's do it. So we did it (I had to beg and borrow from a couple of friends for $2k in downpayment on the loan--note that i did not pay them back and they know it will be years before I do so). I ended up signing the loan paperwork on Aug 15, 2008 (same day as the ch7 filing). I calmly called my attorney afterwards and explained what happened and how I could not be without a car because of the disabled child and large family. He was not happy about my not telling him in advance, but he understood and did *not* seem overly concerned (my intention is to Reaffirm the loan with BigBank Auto Finance anyway). So, we filed an amended petition on Aug 22.

SO what happens if if if the Trustee asks "hey, I see this auto loan is dated same day as [amended] filing?" Do I say: "Well, I needed a used car (it's a clunky station wagon) and this was the only option I was suddenly cornered with. It's a loan; I didn't buy it" (It's the truth; also note that the Kelley Blue Book value is BELOW the amount left on the loan.) One thing I read on here previously was that one should get the loan in advance of filing. I kind-of did this pre-amended petition.

Is this a non-issue, you think, esp because I am re-affirming? Am I making a big deal out of nothing? I'm stressing...

(Note that the amended filing also reversed out the 401k loan repayments as part of my form 22A because I learned that the bank administrator said they would suspend debits from my paycheck if I got a bk discharge, so we ripped out all reference to the 401k bit. I believe this was correct as well and I still passed the Means Test given the disabled childcare changed needs at home.)

The only thing the Trustee has asked for after receiving the Amended petition was home closing dates/statements, current mortgage balances on my home loans and a current written appraisal of my home (which I am reaffirming those two loans , too). My attorney said the Trustee simply wants to ensure that there isn't lots and lots of equity locked up in the home which would exceed the Homestead exemption, and therefore available to creditors. I collected the paperwork and sent off a 30 page deck to the Trustee with all the requested documentation.

Thanks.

[Confused14]

I'm really not sure, but at my 341 the trustee did question people about their vehicles. He also asks just about everyone if anyone owes them money or if they borrowed money recently, whether it be from family or friends. Not all trustees ask the same questions. If the trustee asks about the vehicle, just be honest. If your atty didn't seem too concerned with it, maybe it'll be fine.

[Cali]

These are some of the questions I was asked as well.

I'm really not sure, but at my 341 the trustee did question people about their vehicles. He also asks just about everyone if anyone owes them money or if they borrowed money recently, whether it be from family or friends. Not all trustees ask the same questions. If the trustee asks about the vehicle, just be honest. If your atty didn't seem too concerned with it, maybe it'll be fine.

[WoodSprite]

I don't blame you for worrying about this (a week before your 341 you worry about EVERYTHING), but I would say to trust your attorney's judgement. The timing was unavoidable; the decision needed to be made. The car is clearly not a luxury item, and as long as your equity in the car isn't over the allowable limit, you have not added an asset that could be seized. And even if it is over the limit, if your attorney isn't worried about it, he probably knows that this trustee won't care.

Try to stay calm, knowing you're well prepared and well represented. And as many others have counselled, do everything you can to curb your impulse to explain everything. I have a feeling you and I share that characteristic, Ira! Make the trustee ask for details...don't volunteer anything, except possibly the fact that there's a disabled child in the household. Unbelieveable as it may seem, most questions can be answered "yes" or "no" if you try really hard, and this is one situation where it's in your best interest to let the paperwork speak for itself.

Then come back here and post a really long and detailed message about how it went!

[AngelinaCatHub]

Happy ira:

I do think you are stressing out too much. So you redid the paperwork on the day you purchased a car. Did I read that you have a “special need” child? If so, you need a reliable car and take a picture of it with you and tell the Trustee it runs and is what it is. It isn’t a caddylak. Most of these folks are people like we are and understand good and bad times. Who has not had bad times? ‘Hub

[AngelinaCatHub]

I don't blame you for worrying about this (a week before your 341 you worry about EVERYTHING), but I would say to trust your attorney's judgement. The timing was unavoidable; the decision needed to be made. The car is clearly not a luxury item, and as long as your equity in the car isn't over the allowable limit, you have not added an asset that could be seized. And even if it is over the limit, if your attorney isn't worried about it, he probably knows that this trustee won't care.

Try to stay calm, knowing you're well prepared and well represented. And as many others have counselled, do everything you can to curb your impulse to explain everything. I have a feeling you and I share that characteristic, Ira! Make the trustee ask for details...don't volunteer anything, except possibly the fact that there's a disabled child in the household. Unbelieveable as it may seem, most questions can be answered "yes" or "no" if you try really hard, and this is one situation where it's in your best interest to let the paperwork speak for itself.

Then come back here and post a really long and detailed message about how it went!

[AngelinaCat]

I agree with WoodSprite on this one. The timing was not real good, but *stuff* happens and you have to deal with it. I believe you will be okay.

I can't remember our trustee asking anything about our vehicles--(2004 VW-loan reaffirmed; 1993 Pontiac GrandAm-junker, bought at auction cheap; 1968 Chevrolet Impala-bought years ago, and sitting on blocks, figuratively for 4 years)--other than the Impala because of the possible Antique value if in good shape. We answered truthfully that it was in fair shape--but a definite fixer-upper. It had sat for 4 years because DH had gotten prostate cancer, and everything was on hold while he recovered--then the financial problems had hit, cancer being part of it. But that this car was in no way able to go on the 'Restored Antique Car Show' circuit. The trustee was satisified with that and eventually filed paperwork in our case 'Abandoning Any Interest on Behalf of the BK Estate' in our cars.

Good luck.

Hi 'Hub!

[happy_ira]

Thank you everyone. I very much appreciate the supportive comments and encouragement. What an emotional spectacle, even if only internally in the quietest parts of our souls.

[happy_ira]

Well, yes - "most of these folks [Trustees] are like we are..." my attorney said to me that these people DO have a heart and understand. Bear in mind they review hundreds/thousands of cases per year so they probably see all kinds of things.

As for "bad times" - I tend to think that the Trustees, while they may have a heart, they approach this as a job (you have to, or you go nuts). And they might be compassionate, but they are 'hired' by the creditors. Although, with the billions of dollars being thrown around the past few days with Lehman, Merill, and AIG, what's a little credit card debt wipe-off? That's the least of it. Puh-lease!

[happy_ira]

Make the trustee ask for details...don't volunteer anything, except possibly the fact that there's a disabled child in the household. Unbelieveable as it may seem, most questions can be answered "yes" or "no" if you try really hard, and this is one situation where it's in your best interest to let the paperwork speak for itself.

I am going to try hard to answer tersely Yes or No. I will definitely slip in the fact of disabled child who is on every kind of state and federal disability list/program under the sun yet those funds provided are practically nothing!!!, though the Trustee's probably attuned to it already since "disabled childcare needs" was listed as a line item in "Other" on Sched J as I need to spend money for someone to literally watch her so she doesnt go into...... I could speak for an hour--uninterrupted--about her special needs and developmental challenges.

In fact, I told my attorney I could show up to court with the child attached to her equipment (oxygen, pulse oximeter, beeping away) and wearing her corrective eye patch, etc. but my attorney said to hold off on that, though he did contemplate it for a moment.

[happy_ira]

Woodsprite--I noticed in your signature that today (Sept 16) was yoru last day for objections! Anything?! Coast is clear??

[Confused14]

happy_ira: I wish you the best with your 341. I'm sure all these trustees have a heart. But I think some really don't care and some do.

[WoodSprite]

Woodsprite--I noticed in your signature that today (Sept 16) was your last day for objections! Anything?! Coast is clear??

Thanks so much for noticing, Ira! I only checked PACER three times yesterday (how's that for restraint?!) and again first thing this morning, and nothing has changed since 8/11. I'm not going to believe it until the end of the week, since they could be backlogged with database updates, but my gut and my lawyer both say my case is so comparatively insignificant they just won't bother.

Keeping my fingers crossed...

[happy_ira]

The timing was unavoidable; the decision needed to be made. The car is clearly not a luxury item, and as long as your equity in the car isn't over the allowable limit, you have not added an asset that could be seized.

This is an interesting theoretical point. The car has negative equity of -$5k (Kelley value is $24k, auto loan is for $29k), so there's nothing to sell there. I guess the only hiccup was the timing that looks strange, there's no hiding of assets and I begged from three friends to give me the $2k downpayment with no obligation to repay them, so perhaps there isnt anything to worry about. I suppose the Trustee can raise an eyebrow at the timing (but I do need a car for the baby who has t least one doctor appt per week!!!), but there is really not much else here. Make sense?

[WoodSprite]

This is an interesting theoretical point. The car has negative equity of -$5k (Kelley value is $24k, auto loan is for $29k), so there's nothing to sell there. I guess the only hiccup was the timing that looks strange, there's no hiding of assets and I begged from three friends to give me the $2k downpayment with no obligation to repay them, so perhaps there isnt anything to worry about. I suppose the Trustee can raise an eyebrow at the timing (but I do need a car for the baby who has t least one doctor appt per week!!!), but there is really not much else here. Make sense?

Yep...perfect! You're good, then.

I think I told you that I had to sell my paid-for car before filing, or I would have lost it, since it was worth 10K. I don't get sentimental about cars, but it meant a lot to me that the car was paid for. Worst of all, I HATE leases. But I trusted my lawyer, and I found a dealer willing to do it, and I took the leap. I put down just enough to stay under the NY exemption of $2,400, and literally sank most of the rest in the ground - paying for a septic system on my exempt homestead.

That felt at least as weird and eyebrow-raising as taking out a loan the day before filing, and I was a wreck about it. But it's just standard operating procedure, I guess. So now I'm stuck in a lease I would never in a million years have gone for, but it's a very small price to pay for peace of mind. In a week or so I hope to be able to say that my land and everything on it is mine all mine, free and clear, and that once the stupid lease is up, I'll be free to make better choices.