Advice needed

[Hause]

So, I am filling in September and my car note is ending. One attorney says keep the payments until filing. One says pay it off, it's still under the exemption umbrella. Question can car exemptions be stripped by the trustee if payed off? Or just keep making payments until after 341? Either way it ends in the falls. What r your thoughts?

[LadyInTheRed]

You can exempt the equity you have in the car up to the amount of the available exemption. It sounds like you can exempt the entire value of the car even without the lien. If that's the case, as far as exemptions are concerned, it doesn't matter whether you pay off the car loan. But, the attorney who told you not to pay off the loan may be concerned with the means test. If you don't have a loan on the car, you can't claim the vehicle ownership expense on the means test. Depending on your other numbers, this could cause you to fail the means test.

[Hause]

You can exempt the equity you have in the car up to the amount of the available exemption. It sounds like you can exempt the entire value of the car even without the lien. If that's the case, as far as exemptions are concerned, it doesn't matter whether you pay off the car loan. But, the attorney who told you not to pay off the loan may be concerned with the means test. If you don't have a loan on the car, you can't claim the vehicle ownership expense on the means test. Depending on your other numbers, this could cause you to fail the means test.

Thanks for that. It's currently a loan with late fees. I just didn't kow whether to just spread it out 2 more months or pay it off. Some say get current before fillng, I am not sure if they include late fees or only the principal balance. Anyway, it's easier for me to pay it off and be done with it. The only thing is, that is igoes from a non-asset to an asset case. Dont know if their really is a difference with low income.

[SMinGA2]

If its exempt either way, then paying it off does not make you an asset case. An asset case refers to non-exempt assets.

If you no longer have the car payment - does your actual income minus actual expenses (schedules I & J) show much of a surplus?

[Hause]

If its exempt either way, then paying it off does not make you an asset case. An asset case refers to non-exempt assets.

If you no longer have the car payment - does your actual income minus actual expenses (schedules I & J) show much of a surplus?

Nice. Also, it wouldn't matter much if its apart of schedule I&J. So as long as exemption cover it, I am okay. Has anyone ever heard of their asset exemption being stripped away or reversed by the trustee. Just curious if that has ever happened. I know they can only object, and file motions but still has a judge ever taken those exemptions that were objected away when they were legitimate.

Thanks guys

[ValleYum]

Nice. Also, it wouldn't matter much if its apart of schedule I&J. So as long as exemption cover it, I am okay. Has anyone ever heard of their asset exemption being stripped away or reversed by the trustee. Just curious if that has ever happened. I know they can only object, and file motions but still has a judge ever taken those exemptions that were objected away when they were legitimate.

Thanks guys

I have heard of vehicles where the title is not perfected that the Trustee took, sold, then paid the exemption to the debtor or offered to let the debtor pay him the difference. If you are correctly using the proper exemptions for your state and situation it *should* be fine. This means you are 100% straightforward and totally honest regarding every. single. thing. you put on your BK Petition and schedules.

Like LadyInTheRed and SMinGA2 both said earlier, it could matter a great deal about your car payment being on your means test or the Schedule J. Not all of what you may consider your 'real' monthly expenses count. You may find that the Trustee thinks your DMI is considerably higher than you do. If you have too much disposable income (the total you get when you subtract your expenses on Schedule J from your income on Schedule I), you could be forced into a Chapter 13 payment for 3+ years regardless of having passed the means test.

It may be something to think about and to specifically ask your attorney about. Good luck!

[Hause]

I have heard of vehicles where the title is not perfected that the Trustee took, sold, then paid the exemption to the debtor or offered to let the debtor pay him the difference. If you are correctly using the proper exemptions for your state and situation it *should* be fine. This means you are 100% straightforward and totally honest regarding every. single. thing. you put on your BK Petition and schedules.

Like LadyInTheRed and SMinGA2 both said earlier, it could matter a great deal about your car payment being on your means test or the Schedule J. Not all of what you may consider your 'real' monthly expenses count. You may find that the Trustee thinks your DMI is considerably higher than you do. If you have too much disposable income (the total you get when you subtract your expenses on Schedule J from your income on Schedule I), you could be forced into a Chapter 13 payment for 3+ years regardless of having passed the means test.

It may be something to think about and to specifically ask your attorney about. Good luck!

Thanks. I'm not too worried, because even if I lose. I will lose being 100% honest about everything.

[ValleYum]

Thanks. I'm not too worried, because even if I lose. I will lose being 100% honest about everything.

Good for you for thinking that way!! BK was created to help the honest debtor in need though. You should be just fine.