question re: schedule J and car payment

[xraya]

Hey guys, I have a quick question. I haven't met with my attorney yet, just sent in the prelim paperwork yesterday. I have been doing a lot of research and I printed out some blank copies on bk paperwork to try and crunch some numbers myself. So here's my question.

My current income is below the median for my state, but it is still pretty high for a single person (thank you Massachusetts!). On my fame schedule J, my DMI is going to be too high unless I include my car payment (which I had planned to surrender) It's a pretty big chunk too, $440, so that would be hard to fit into the other categories.

So should I say that I intend to reaffirm my car (which I have thought about doing, just don't want to be stuck with it), and then if the reaffirmation gets denied do a retain and pay? If it does get denied, do I have to redo the schedule J to reflect that? Or do the reaffirmation and then rescind it within the 60 days?

I know this is all stuff my attorney will be able to help with, I just like having a plan of action. Thanks!

[tobee43]

well...we listed out car payment on sch j...but did end up surrendering the car, which was no problem. (we also were not certain at the time if we were going to keep it or not).

i also know, had we chose to keep it, the credit union would have been fine with it...who wants another used car.

however, we did list the payment which was over 400 as well..

[ValleYum]

Hiya!!

Wow, $440 would be very hard to shuffle into other categories without making them appear out of control. I understand your need to have a plan, though.

Lots of people post their numbers for schedule J here and then all the awesome, knowledgeable posters we have can give you guidance and suggestions. They are wizards at this! Your attorney will likely be able to help you with those numbers too as he will know what your local trustees will let fly.

[xraya]

haha thanks for the understanding. I'm definitely a scary type A list maker, have to have a plan and know every exact detail of whats going on. You should see me when I plan a vacation! I think that's one of the reasons I have put my bk off, because it's scary and I'm giving up control to the court and trustee. Enough is enough though, and the BF and I are planning to get married in the next year or so, and I definitely want this out of the way well before we merge any assets!

[debee]

So should I say that I intend to reaffirm my car (which I have thought about doing, just don't want to be stuck with it), and then if the reaffirmation gets denied do a retain and pay? If it does get denied, do I have to redo the schedule J to reflect that? Or do the reaffirmation and then rescind it within the 60 days?

I believe GMAC is your lender. They're not known to require reaffirmation agreements. You should be able to just indicate "reaffirm" on your Statement of Intentions and ride-through without ever having to sign one. You'll be want to current at time of filing. (You can confirm their position on reaffirmation agreements by calling them and asking. You can usually do that anonymously if you call from a number not associated with your account.)

[debee]

If your median income is below state average the presumption of abuse does not arise and the DMI does not generally matter. The DMI is important if you are trying to do a 13.

Below-median filers don't have to worry about the means test "presumption of abuse", but they do have to worry about DMI. If the bottom line on schedule I/J shows enough to fund a chapter 13 plan, their chapter 7 case will be dismissed.

[xraya]

If your median income is below state average the presumption of abuse does not arise and the DMI does not generally matter. The DMI is important if you are trying to do a 13.

This is directly from my attorney's website, under What is Chapter 7?
"However, even if the means test is inapplicable to you because your family makes less than the median, a "totality of the circumstances" abuse test still applies. This test is more vague but essentially means that if you have the ability to fund a reasonable Chapter 13 repayment plan out of your income you should do so. This common-sense nugget at the heart of the bankruptcy system states that if you can afford to pay none of your debts, you pay none of your debts, if you can afford to pay some of your debts, you pay some of your debts."

Debee, you are correct. GMAC is my lender. It's going to be tough to get the payments current though, without working a bunch of extra shifts and possibly screwing up my income.

[ValleYum]

Debee, you are correct. GMAC is my lender. It's going to be tough to get the payments current though, without working a bunch of extra shifts and possibly screwing up my income.

Can you ask them to defer a payment and add it to the end of the note?

[tcreegan]

Hi xraya,

Your attorney will work something out for you; if you don't keep the current car, you are still going to need a car, right? So some expense has to go in there; the IRS sets the standard for car ownership cost at $496 so you should be OK.

Hang in there!

Tom in Colo