Trustee and non-exempt vehicle

[cag]

Getting closer to filing and I have one vehicle that will be exposed and I want to keep it.

Wondering if a Trustee will allow payments over time if so how long do they usually give someone to repay it or will they want it all up front.

Anyone have any experience with this? I can probably make monthly payments for a year but, not all up front.

Thanks

btw Ch7 in CT

[optimistic1]

for you to receive your discharge, you will need to pay it in full, I honestly dont think there is a trustee anywhere, that would allow you to make payments for a whole year. Sorry.

[cag]

Thanks, wasn’t sure….A quick discharge is more important!!

[CH33 Paralegal]

wait, you mean pay money over time to the trustee in lieu of liquidating the vehicle?

That's a chapter 13.

Believe it or not, the trustee is working on behalf of the unsecured creditors. It is the trustee's job to make sure that any money that can be generated in the unsecured creditors' favor is in fact generated. They have a duty to do this. They also have a financial interest in this because they get proceeds from things that are liquidated.

If you file a Ch7 and the car is worth enough to make it worth the trustee's time, he will sell it. It is not a slam dunk that the trustee will sell it though...it depends on how much money can really be generated.

If you want a slam dunk guarantee that you can keep the car, you can propose a CH13 where you pay the group of unsecured creditors a set pool of money that is consistent with the amount of wealth you propose to retain through the bankruptcy.

[cag]

Well, I think the vehicle is worth about $10,000…. I was thinking a 13 but the added expenses of a 13 and being under their finger for x number of years squashed that idea for me.
Maybe I should just try to sell it now before I file and us the proceeds for improvements to my house.
Kind of sucks seeing I had this car for 30 years now. Oh well, can’t have everything I guess.

But, thanks for the input…it’s appreciated

[willbfree]

Cag there is another way. If you own the vehicle outright take out a title loan against the equity in the car. You will have to spend that money and account for it to the trustee but then there will be no equity left in the car for the trustee to take. We owned a vehicle outright and our atty suggested this method as one way to deal with the issue.

[cag]

Thanks Willbfree but I already did that for another vehicle I use everyday. I just didn’t want to get any deeper with another loan. 3 vehicles involved, first one is covered by exemptions (my daughters car but in my name) 2nd car is the only one I have as a everyday driver and the one I took the loan out to keep it. Just don’t want to take another loan out for that third car.
My thought for the 3rd car was if it’s worth $10,000 I could make an offer of $7,000 and see what happens but, I couldn’t pay it all up front that’s why I was wondering if they would spread it out over a year.

[willbfree]

You know it never hurts to ask. Have your attorney make the offer to the trustee. The trustee's goal is to make money and you never know until you try. Considering the economy today and car auction prices the trustee may just take you up on the offer. Good luck.

[CH33 Paralegal]

careful about selling the car before bankruptcy. and be careful about taking a lien out on it too.

If you sell it, you need to sell it to as close to FMV as possible. If you lowball the car just to get some money out, it can be viewed as destroying equity, just like if you did the same thing to a house. Any major transfers of property within the last 6 years can be reviewed by the trustee as well.

If you take a loan out on it, you'll have to account for where the money is and you'll want to be DEFINITE that the lien has been PERFECTED. if the lien is not perfected, the creditor can then sell the car AND discharge the debt as a general unsecured debt. I would think that he'd have access to any remaining loan money as well that was above and beyond exemptions. In a nutshell it would be as if the title loan guy just loaned you money unsecured.