Car ownership expense, can use it?

[peacesoon]

The car is paid off? Anyone know? I can't remember if I asked this on here or not?? Anyone else be able to do this?

TIA!

[justbroke]

The car is paid off? Anyone know? I can't remember if I asked this on here or not?? Anyone else be able to do this?

It depends on your District. The 5th (TX, LA, MS) and 7th (IN, WI, IL) U.S. Circuit Court of Appeals say you get it. Others haven't dealt with it, so it's District specific.

There are a few which permit the inclusion of a $200 allowance if the vehicle is at least 6 years old or at least 75,000 miles.

[LuciluS]

Is the $200 car allowance in addition to documented gas receipts, oil changes,new tires etc.?

[justbroke]

Is the $200 car allowance in addition to documented gas receipts, oil changes,new tires etc.?

yes. They figure that if you own a car that is 6+ years old or 75,000+ miles, you have maintenance issues that are not included in the Operating Allowance. I would assume that vehicles with that number of miles or of that age, have many more mechanical issues than a new car with few miles.

My personal opinion is that the $200 was a compromise between allowing nothing or the $489 full ownership allowance for a car that had a lien on it.

[LuciluS]

Hmm, another ?? for Attorney. I own a 1999 Toyota Sienna Van with almost 97,000 miles on it. It was 10 yrs. old on 5-12-99. First car I ever paid cash for.

The back seats are out & I had a lift installed with a remote control for my scooter. I'm hoping it might be considered partially exempt as I can prove in writing from my Neurosurgeon I'm 100% disabled & it's also noted in the SSD Administrative Law Judge Approval for SSD. Value is around $5,800.

Afraid by the time we file 9/30/09, our home might possible have some equity as of 8/31/09. We signed at the Title co. & moved in on 12/31/07. Arkansas was not affected dramatically in the drop in Housing Value, especially our area.

Want to be able to exempt Our 2009 Fed & State Income Tax Return & possibly $1,000 in our savings. I know, I can't have my cake and eat it too.

thanks, justbroke!

[AMISLANDER]

The car is paid off? Anyone know? I can't remember if I asked this on here or not?? Anyone else be able to do this?

TIA!

My experience with a paid off vehicle & BK:

When I filed in 2005, my 4Runner was paid off. I was only allowed a $1K exemption on it. It had a lien in my mother's name on it. I ended up paying the trustee to keep it. In retrospect, I should have let them take it....let it be their nightmare in the gas game. However, I still have it (why let go now, right?) and it does get 20 mpg (city) so it's worth keeping.

You need to check your state exemption rules. It's a very personal choice. Being that your credit is basically screwed at this point, I'd get rid of all & anything that was high maintenance. Cut your losses now.

[OhioFiler]

We owned a vehicle without a lien on it so we sold it and used the proceeds as a downpayment on a new car. New cars depreciate quickly out the door so now we have no equity in the new car but at least we don't have to surrender the one we owned. We needed to get rid of that gas hog anyway.

[Kpower]

How do you value a car that is paid off? Trade in, Personal sale or Retail value?

[OhioFiler]

How do you value a car that is paid off? Trade in, Personal sale or Retail value?

This is specific to your district. Each one is different.

[LuciluS]

How do you value a car that is paid off? Trade in, Personal sale or Retail value?

BK Attorney's paperwork states to use NADA Retail Value. I think AR is in the 8th US Court of Appeals.

[2manybills]

Hi All:

I'm new to this site but have been lurking for a while. WE will be filing in So. Cal in July, 2009. At the time we file we will have 2 car payments left on my husband's truck. I've been researching this because without the ownership expense we will be very close on the test. See the below article. Also, an attorney on the ************************ website is from California. She stated in her article that although California is a State that has not been allowing the ownership expense if you own a car, they will allow it even if you only have 1 car payment left. She said she wished folks in those States would go out and get a "personal loan" from a relative and record it as a lien on their vehicle to pay their attorney's fees in bankruptcy.



http://www.************************/...cle-ownership-

[doingpoorly]

My experience with a paid off vehicle & BK:

When I filed in 2005, my 4Runner was paid off. I was only allowed a $1K exemption on it. It had a lien in my mother's name on it. I ended up paying the trustee to keep it. In retrospect, I should have let them take it....let it be their nightmare in the gas game. However, I still have it (why let go now, right?) and it does get 20 mpg (city) so it's worth keeping.

You need to check your state exemption rules. It's a very personal choice. Being that your credit is basically screwed at this point, I'd get rid of all & anything that was high maintenance. Cut your losses now.

I am curious....Why was it paid off but still have a lien holder (your mother) How much was your mothers lien for ? Did you have a loan agreement with your mother? I don't understand if there was a lien and a loan how you could be made to pay for it. Unless, of course, it was worth say $5000 and you had a $1000 exemption and a $2000 loan THEN you would have to pay $2000 for the difference. Please tell the specifics of why you had to pay for a vehicle with a lien on it. : )

[AMISLANDER]

I am curious....Why was it paid off but still have a lien holder (your mother) How much was your mothers lien for ? Did you have a loan agreement with your mother? I don't understand if there was a lien and a loan how you could be made to pay for it. Unless, of course, it was worth say $5000 and you had a $1000 exemption and a $2000 loan THEN you would have to pay $2000 for the difference. Please tell the specifics of why you had to pay for a vehicle with a lien on it. : )

I borrowed some money ($5K) from mom so she put a lien on the car. Being the first lien holder, the trustee would have to deal with her to take the paid off vehicle away from me.

At that time (2005) being that the 4Runner was five years old, the trustee's guestimate on the value was at least $10K and so he wanted it. However, I had a laundry list of issues that pertained to the vehicle, first off was the lien, then the catalytic converters needed to be replaced (Toyota's estimate was $3,500). By the time we were finished the trustee was seeing that taking the car and having to turn it over, especially with gas at $4/gallon wasn't going to be easy as there were a glut of SUV's going on at that time.


So, I gave up my income tax return ($1,500) which he applied to the $3K figure that he came up with and I paid him $1,500. So, that is how the situation of paying to keep a car already owned occured.

As far as the lien, that just pissed him off because mom would have had to of been compensated $5K by the trustee in order to reposses the vehicle & it being only probably worth $5K by the repair factor, it just wasn't worth it.

[justbroke]

At the time we file we will have 2 car payments left on my husband's truck. I've been researching this because without the ownership expense we will be very close on the test. See the below article. Also, an attorney on the ************************ website is from California. She stated in her article that although California is a State that has not been allowing the ownership expense if you own a car, they will allow it even if you only have 1 car payment left.

The problem isn't that you can't use the ownership allowance when there are less than 60 (or 36) payments left. The problem comes when you have a positive disposable monthly income (or it's not that negative) and the Trustee contends that the car payment will be gone in 1-12 months and that payment could be used to pay unsecured creditors. Yes, you pass the means test, but you don't pass the Trustee's other abuse test.

For example, say that you have a disposable income of $-50.00. You pass the means test! However, your car is 4 years old with a $380.00/month payment and will be paid off in another 6 months. The Trustee can (not will, but can) argue that with the $380 ending "real soon", that $380 can be used will make your disposable income $330/month which makes your case an abuse.

Talk to your lawyer about this. If you're over-the-median, the Trustee may still give you grief on that. I've read a few cases like this already. Work with your attorney.

[2manybills]

Thanks JustBroke. We are still fine on the schedules. Thanks to our living expenses here in he great State of California. We are only including $13.58 for that car payment on our schedules (the balance due on the note divided by 60). But our other expenses, car gas, insurance, all of that. On top of the fact that my husband's paychecks are now less than unemployment would be. We will wind up with a minus net income.

I fortunately have worked in the legal field in California for over 30 years (not BK) and a very good friend of mine is handling our case. But the posts on these boards from folks like you with a wealth of knowledge has been very helpful in preparing for this.