How do I determine local district standards?

[OhioFiler]

...so I take on new auto debt, file/discharge/close and then something catastrophic happens and I can't make the payment? So the car goes back to the lender and they want to sue me for the gap between the remainder of the loan and the combination of what I've already paid and the resale value of the vehicle? Is that what a deficiency judgment is?

Your auto loan will be discharged with your bankruptcy case. You will be able to reaffirm the loan in the bk but it's generally suggested not to reaffirm. What you will do is referred to as a "ride through" which means you let the debt be written off but continue to make timely payments to the lender. So long as you are paying them they won't repo the car.

If you ever need to stop paying the loan you can simply walk away from the vehicle regardless of condition, mileage or anything else. You would owe nothing.

[Bex]

Thanks! And article on ownership allowance:

Oh wow, that makes perfect sense--so the discharge releases the borrower from the contract, but if paying as agreed, the loan is as good a risk as it ever was, so a repo only works against the lender's interest...they can't MAKE anyone enter into a new contract against their will, so they do nothing. Wow. Nice.

And I think the vehicle ownership allowance is close to a given on the paid-off car, too, as I posted earlier, that Best Case software fills the $489 in automatically (oops but I only checked my district) AND I just read this (dated 6/15/2009):





So ...now that I don't think this is a means test issue (hoping to see atty this week--depends on some things at work)--all is left is a fairly win/win kind of decision. Having choices feels really nice--is this what life was like before I became a bond slave for credit card companies??!?

In an attempt to stop hijacking here, I'm putting the rest of what I responded in its own thread...

[eddiep]

bex
I have noticed that several people have posted that they could not do a ride through on the car. Some districts make you either reaffirm the debt or surrender the car. just a heads up

[eddiep]

wipetheslate

are you considering filing pro se? I just wanted to let you know that you could ask these district specific question (not that I don't want you posting questions here )
but you could have an initial consultation with an attorney usually for free and pick his brain without retaining him.

[wipetheslate]

Oh yah, sorry about hijacking your thread

Ha, ha. No worries. I did discover that the IRS allows $200 additional for operating expenses when a car is owned free and clear and is 6 or more years old with 75K or more mileage.

Some places will give you the ownership expense. If they don't you should, at a minimum, get the extra $200 for operating expenses. You just have to be sure to put it in the correct spot on the means test.

[wipetheslate]

wipetheslate

are you considering filing pro se? I just wanted to let you know that you could ask these district specific question (not that I don't want you posting questions here )
but you could have an initial consultation with an attorney usually for free and pick his brain without retaining him.

I'm thinking about doing that. I don't mind paying someone $500 or so who knows what trustees routinely do and do not accept in Hawaii. I just don't want to go thousand of dollars more in debt.

I'm a researcher by profession, so I feel pretty equipped to deal with a pro se filing.

[wipetheslate]

Your auto loan will be discharged with your bankruptcy case. You will be able to reaffirm the loan in the bk but it's generally suggested not to reaffirm. What you will do is referred to as a "ride through" which means you let the debt be written off but continue to make timely payments to the lender. So long as you are paying them they won't repo the car.

If you ever need to stop paying the loan you can simply walk away from the vehicle regardless of condition, mileage or anything else. You would owe nothing.

To go the new car route, it sounds like keeping your old car would be a prudent move. I just read something tonight about someone being totally up to date on payments but still getting their car repo'd because the debt wasn't formally reaffirmed. I definitely wouldn't want to end up carless!

[Bex]

Hey I just now read this:

http://www.moranlaw.net/car-ownership.htmGet ownership allowance on the means test

A bk lawyer saying if your car is paid off and you want to be completely assured of the ownership allowance, just create a lien secured by the car (and instructions on how to do so).

And yes, I went "DUH!" Because isn't that the last place destitute folks go for solvency, the family auto?! Totally natural, normal, believable...I like it!

I have an appt for consult on Thursday--will get (more) definitive answer on this car thingy. Oh yah, with the software, it functions like you would expect an allowance to: you deduct your payment from their $489 allowance, then you add the payment again as a liability...well, with cars (unlike houses) no matter how large your monthly obligation, you only get $489 (boo for people with big car debt, but at least it's equitable if you give it to ALL car owners).

Because, based on the wording of the means test form:

if you owe nothing, you get $0
if you owe $50k, you get $489/mo
if you owe $1, you get $489/mo

I'm having a problem seeing where the fairness is between the first and the last! And, I reiterate, you get nearly the same "vehicle operation" as you would for using public transportation--excuse me?!?! When was the last time a commuter paid insurance and taxes and gas and repairs that were equivalent to those of an owned vehicle??!

Anyway, back to the allowance: how is housing different other than wanting to keep the market stable??? My giant house pmt is truly the origin of my debt problems, yet the means test lets me have BOTH the $635 allowance AND the $920 payment against my income...not at all like the car ownership scenario--if it were treated that way, you'd only ever get $635. Of course, I'm sure we don't want to allow bk courts to mandate the value of our homes, but even the *illusion* of parity would be a nice change.

I would be much happier if Congress would just quit this charade that they care atall about their constituents. Just say, "we're screwing you to the wall and here's why" and then ring the bell and we'll start the match!


Last, but not least: I still don't GET the treatment of student loans for means testing. I know they're not dischargeable, but are they still included in your "Total Non-Priority Unsecured Debt" (Line 53, Form 22A)? Or not? They certainly are non-priority unsecured by definition...for MDI calculations, though, I think the payment goes at the end, Part VII: Additional Expense Claims--ridiculous that they have no place in the means testing, but it's not going away, so you can't calculate any kind of disposable income without either including them or expecting the filer to default.

This is so painful as I am such a lover of logic... *sigh*

[Bex]

eddiep thanks--you're probably dead on

bex
I have noticed that several people have posted that they could not do a ride through on the car. Some districts make you either reaffirm the debt or surrender the car. just a heads up

My new car is not dead in the water yet, but I'm really REALLY reluctant to go for a new monthly obligation at this time...having said that, the more I thought about it, the more I believe that there's no way a lender would let me do a ride through having never had a car loan before and only, say, 2-3 months payment history.

So, if the means test is no longer an issue, the only reason to buy is to get a slightly better interest rate buying now vs after discharge.

Anyone have any guesses as to what kind of rates to expect before and after discharge?

Truthfully, I don't think want to pay for as much car as lenders tend to like for security--generally they don't like to lend on anything older than 5-6 yrs and my price range and desired make (range) has me looking at more like the 6-8 year olds. I think the timing is just not quite right and will have to follow my gut (and remain focused on the primary goal here: saving my @$$!!)

Thanks for your input--the whole reaffirmation deal, both home and auto, has given me a lot to think about