Repo and Means Test

[Clouddancer]

How would this affect the means test if just prior to filing Chapter 7 one or both cars are repo'd? Would that mean you wouldn't be able to use them during the means test for qualification?

[Clouddancer]

bump

[Meatstick]

It could vary by district. If your under the median income it is a moot point. If your over and need one or both vehicles to pass the means test they may use it against you to try and possibly push you to a 13.

[aces67]

It won't matter if your under the median or not. If they are repoed you can't use the payment as a monthly expense so if it causes you to have disposable income every month then you'd be pushed into a 13.

We were under the median but still needed our truck payment to pass the means. We had to keep the truck and then let it go back after the 341.

[coolmom04]

It won't matter if your under the median or not. If they are repoed you can't use the payment as a monthly expense so if it causes you to have disposable income every month then you'd be pushed into a 13.

We were under the median but still needed our truck payment to pass the means. We had to keep the truck and then let it go back after the 341.

How did that work? I am guessing you didn't reaffirm then, right? So at your 341, did you say you intended to keep the truck, but then let it go anyway?

[Meatstick]

We were under the median but still needed our truck payment to pass the means. We had to keep the truck and then let it go back after the 341.

If you were under the median income why was anyone concerned with the means results. Does the BK code not specifically state that "if" you are under the median income that you can proceed without presumption of abuse. ?? Maybe you meant you needed to include your truck to have a negative DMI on Schedule J ?????

[coolmom04]

From what I've read/heard, even if you are under the median, if you have a large positive DMI, you technically have enough to pay towards debt. Maybe I misunderstood though.

[Meatstick]

Youare correct coolmom4. The poster above stated they were under the median income but needed to include their truck payment to pass the means test. That is a direct contradiction to how the BK code is written.

You can be under the median (no means test required) and proceed to file your Ch7 petition. When you get to filing your schedule J which is forward looking, if you have a positive DMI you could be pushed to a 13 even being under the median.

[coolmom04]

Okay... gotcha!

[Clouddancer]

It won't matter if your under the median or not. If they are repoed you can't use the payment as a monthly expense so if it causes you to have disposable income every month then you'd be pushed into a 13.

We were under the median but still needed our truck payment to pass the means. We had to keep the truck and then let it go back after the 341.

But don't you still owe the money on the vehicle since it's secured? I was advised that it didn't matter if they repo'd it or not. I would still be able to use the deduction. I guess that is why they don't come back after people when they don't re-affirm.

Another issue, if I cannot afford the vehicle and I go out and buy a replacement vehicle prior to bankruptcy or prior to the other one being repo'd, how would that affect my bankruptcy? Would I still be able to keep the lower cost new vehicle and let go of the expensive one?

[aces67]

Sorry that's what I meant. We had to keep it to use on the Schedule J. We just changed our statement of intentions after the 341.

We were told we couldn't use the payment unless we still possessed the vehicle b/c in a Ch7 if it's repoed first then the Ch 7 is going to wipe that debt clean so you have no payment to make on it.


As for buying a new vehicle I'd ask your lawyer first. I know my cousin filed ch 7 and her attorney advised her to buy a new car first and then file and surrender her old vehicle.