New Here with Questions

[nojusticehere]

Hi everyone. First let me say that your posts have been very helpful. I've been reading them for about a week now, and most have answered my questions. I do have a couple of questions, but let me give you a short run down on my history.

I am over $70,000 in debt, 2 vehicles (one in my name and the other in my name and my son's). I am behind approx 4 months on one vehicle which has not been repo'd yet and am current on the other. I am up side down on the vehicle I'm behind on. The other vehicle was purchased this past Feb for my son, however he's no longer at home, enlisted in the military. Since I knew I would be losing the other vehicle I'm keeping the one that's current. These two vehicles together are approx $60,000 of the debt, the rest is CC and furniture. I do not own a home. I live in Florida. I make well above the median income level for this state but all my debts eat up my pay and I end up using pay day loans to make due.

So here's my questions:

(1) The vehicle that is also in my son's name, how will I place that on my BK? Also will it affect my son's credit. I want to keep this vehicle. I don't want it to affect his credit. I am the primary and will continue making the payment ($410 monthly).

(2) I also have anothe secured loan for furniture. Will I have to return these items.


(3) Because I'm above the median level for my state, does that mean I won't be able to file C7?

Any help would be greatly appreciated. And thanks again, this site rocks!!!

[HenriettaHen]

Howdy! Let's see..

Vehicle 1 is going back. I don't have experience with this part.

Vehicle 2. Your son is a co-debtor with you on this secured loan. You can reaffirm or surrender. (Read the posts about reaffirmations - it's a bit strange how that is working lately.) As long as the payments are current he should not be affected. You will be listing him as a co-debtor on your petition.

Furniture - Check the details of your contract. You could reaffirm or surrender.

Chap 7 vs. Chap 13 : You'll have to get all your income and expenses together and take the means test to see where you stand on this one. I think there are posts here where you can find an online means test calculator.

As always, it's very important to schedule some interviews with a few bankruptcy lawyers. It should be free and you will learn a lot.

[Minnymouth]

If you make well above the median for your state, then more than likely you will be filing a Chapter 13, you really don't have a choice in the matter. High income, lots of extra income to pay creditors....

So be prepared to be forced into a 13 for 3-5 years.

Plan a legal consultation with at least 3 attorneys in your area. Make list of questions you want answers for and see in what direction they want to guide you into too.

Letting the one car go back is not a problem, nor do I think keeping the other and still making payments on it probably will not affect your son at all..... only if you should default on the vehicle would it affect him...

Got questions - ask

Keep us informed.

[HHM]

Since most of your debt is secured debt, BK may not be the best option for you.

The only issue would be a deficiency balance on vehicle #1 (the one that you are behind 4 payments), which might be worth filng BK, just to have the Repo and deficiency all taken care of in one shot.

For the furniture, that issue somewhat depends on when you bought it. If you bought the furniture in the last 6 months, the finance company may put up a fight. Otherwise, the finance companies huff and puff a bit, but in the end, they let you keep the furniture and the debt is discharged (however, they do have a "legal" right to re-take the furniture, in reality, they rarely repo furniture because there is no meaningful market in used furniture).

[HHM]

Oh, I didn't notice that you were "well above" the median income.

Your better option is probably to just let them Repo the car, and simply pay the deficiency balance. If you file chapter 13, you will end up paying it anyway.

Based on the limited information you provided, your not really a candidate for bankruptcy, of any chapter.

1. You are well above median income, so you would have to file chapter 13
2. Nearly all your debt is secured debt (which means you have to pay it anyway)
3. You have only 1 car you are behind on which you want to give up anyway. If you let them repo, you will need to pay the deficiency balance, if you file chapter 13, you will pay the deficiency balance.

I don't think you need to file BK.

[lrprn]

Welcome to BK Forum, NJH - glad you found us!

(1) The vehicle that is also in my son's name, how will I place that on my BK? Also will it affect my son's credit. I want to keep this vehicle. I don't want it to affect his credit. I am the primary and will continue making the payment ($410 monthly).

The key here is if your son still lives with you. If he does, then you are a two-person household and can likely keep both cars if the equity in both doesn't exceed what you can protect with Florida's exemptions.

We had the same situation with two of our cars - our early 20s kids were co-signers. Our Ch 13 lawyer put both cars in our bankruptcy and the trustee is paying them off over our five year plan. This shouldn't affect your son's credit - he didn't file bankruptcy, you did. Just have him watch his credit reports carefully. Sometimes mistakes are made - if anything stating "IIB", "bankruptcy", or "write off" appears on his reports related to the car, he should dispute that to the credit report agencies to get that corrected immediately.

(2) I also have anothe secured loan for furniture. Will I have to return these items.

When did you purchase the furniture? Unless it was just a few months ago, the furniture store may huff and puff but they really don't want the items back - they just want to be paid. Now if you bought a flat-screen TV or other more resellable items like that, then they just might come get that if your purchase was recent. Otherwise chances are you'll be able to wipe the loan out and keep your furniture.

(3) Because I'm above the median level for my state, does that mean I won't be able to file C7?

Depends on how much above your state's median income level you are and what your family size is (1 or 2). It's likely you'll have to file Ch 13.

The biggest concern I see for you is that 90% of your debt is secured, so you aren't going to get a lot of immediate relief from filng bankruptcy. However, filing Ch 13 will spread your car payments out over five years which may be a great help to you. Also Ch 13 will allow you to make up any payments on the cars you are behind.

Hope this helps!

[nojusticehere]

Ugh! So filing doesn't seem to be the way to go?? Is that what I'm reading here? Well I'm extremely upside down on the 1st car (the one I'm behind on) and when it's repo'd I'll have to pay the deficiency. I don't want them garnishing my wages either. My son does not live with me now, he left in June. I don't want this showing up on his credit report. As for equity in the cars, neither has any at this time. I purchased the furniture in Feb after my other residence burned down (no insurance) and I lost everything. So it's new. As for being above the median, about $20,000+-. I took the mini test here on line and it said that I qualified for C7, but of course I know that could change after taking the entire test.

Ok, the car that gets repo'd - I will have to pay deficiency under C-13? Along with everything else? Seems I may be in the same shape even if I file. Ummmm. Any ideas?

[NoName]

What if your son began making the payments on his car? Would that help ease your financial burden?

[nojusticehere]

It probably would, however, then I would not have a car nor the money to get one. I'm in bad shape here and not certain what to do. My son is in bootcamp right now and not certain what to do in this case either. ugh! My mind is a whirl wind right now.

[NoName]

Have your son start making the payment on his car. The military can set up an automatic deduction from his paycheck to make the payment each month. He can't take his car with him to boot camp, so that would give you some time to find a new one or start making payments on the one that you already have.

[nojusticehere]

NoName, I understand what you are saying. And under normal circumstances I would agree. I'm behind close to $4000 on the other vehicle,(which has no equity) plus my living expenses here in Florida are high, rent, elect, water, vehicle insurance, etc. I'm not married nor do I live with anyone, so I don't have any extra income. That, along with all my other bills, have made it impossible to live a normal life. I don't have anything unecesary in my home, no frills, I don't live extravagantly. I just made some really poor judgements and am now paying for them dearly. If my son makes the payment, that will not bring me up to a point where I have any extra money. and it won't help to dig me out of debt. I am negative each month and have been having to use CC for food, gas, etc. Half way through the month I have absolutely no money left for necessities.

I have an appointment with a couple of atty next week, hopefully they will be able to shed some light.

[NoName]

No offense was intended NJH. I was just throwing out some options. As was stated above, 90% of your debt is secured, so even filing Ch13 is not going to help the situation much.

Good luck with the attorneys. I hope that they help solve this problem for you. Please keep us posted.

[nojusticehere]

Oh, no, no offense taken. Please understand I appreciate any help I can get!! I hope there is Something I can do. Under Ch13, are the payments reduced to a manageable monthly payment based on a person's living expenses? Correct me if I'm wrong, but after taking in account of all living expenses and state/fed allowances, if the amount paid to the trustees paid from the amount of "left over" money?

[NoName]

I am not 100% familiar with Ch13, but I believe that the debt amount on secured items is not reduced at all. You still pay 100% of the secured debt.

Only unsecured items can be reduced through Ch13.

Someone please correct me if I am wrong.

[nojusticehere]

I guess what I mean by "reduced" is; if the car payment is 350, plus behind 4 months, and then I have all the other debt and the car that I'm keeping, does that mean I'll be making well over $1000 a month in payments or will it be reduced to a manageable amount?