Just a few questions

[blah08]

I have looked around and have not found the answers to my certain situation. My wife and I filed for ch. 13 at the begining of feb. We only had 2 cars and a funiture loan. we decided to let my wifes car go back because it was falling apart and badly up side down. So we have had a lawer from the get go and they informed us to get a new vehicle, so we did.
My question is, they are trying to say we are going to have to pay $850 a month. We in no way can afford that. my truck is in there and we were paying 550 a month for it. For my understanding before filing we were not going to be paying the same amount towards the truck, now the attorney is saying that we need to let the truck go back and convert to a 7. How the heck are we suppost to get a new vehicle????
I only owe around 16k on the truck. We only have about 25k of debit and thats including all the fees from the bankruptcy. So how come our monthly payment is so high??? Their is only 2 secured debits in the bankruptcy which is the truck and a furniture loan.

Sorry for the long post, any help is appriciated though! Thanks.

[momofthree]

Your payment is based on your disposable income, not on your level of debt.

income - expenses = ch. 13 payment. Sometimes this means that you pay up to 100% of your debt back.

What does surrendering the truck have to do with converting to a ch. 7? If you have the option to convert, you should be able to convert whether you keep the truck or not....unless you're past due on it and only filed ch. 13 to catch up on the arrears?

Why did your attorney advise a ch. 13 in the first place? You only filed a little over a month ago, what has changed that now makes you eligible for a 7?

[blah08]

honestly i dont know, we ended up getting behind because of xmas, neither of the banks wanted to work with us on the amount we were behind on and they started trying to repo, so we actually filed bankruptcy out of panic.
unless we catch up on about $2500 on the truck we have to let it go.
On the payments, we were barely getting by just on the bills we had. They said we would pay the bills we already had plus 850 a month for bankruptcy, which the 850 would replace the 550 we were paying for the truck.
So 850 would just break us!

[blah08]

also, i dont know what has changed, i think we F'd up on the attorney choice, if we could have done a 7 to begin with im sure we would have.but we went from household income of about 6k a month to about 3k and survived the change for about a year then big, unexpected, expenses came and hurt us.

[momofthree]

So, you ARE behind on truck payments. In that case, you would have to surrender the truck if you convert to a 7. I'm confused over the numbers though. How did they arrive at the $850 a month payment. If you have that much DMI you wouldn't qualify for a chapter 7 anyway. But if you don't have that much DMI, then why the high payment?

If your truck payment is $550 + $69 arrears ($2500 spread out over 36 months) + attny fees ($50ish?) + trustee fees ($60ish?) = $729. Actually, I guess that's not that far off, since you also mentioned paying for furniture...

I guess it just comes down to how badly you want the truck. I'm guessing you can't cram it down?

[momofthree]

Or you could attempt a 60-month payback to lower the payments, but do you really want to be in a 5-year ch. 13 over a truck? I personally wouldn't....

[SMinGA]

You mentioned replacing your wife's vehicle. Is the $850/mo including the payment on the newer vehicle, your truck, furniture, etc. into the 13? Could the error be that you're expecting to pay the car payment on top of the 13 while the 13 actually includes it?

There may be a 'minimum' amount you need to pay to pay off the secured items. You said you owe $16k on the truck, what is the balance on the car, what is the balance on the furniture? How much of your atty's fees is included in the plan?

Secured debt that is being paid off in the plan must be paid off in full. A small % (5-10% depending on your district) goes to the trustee. So your payment, less the TT fee, has to be enough to pay off all the secured debt. The good news is the interest rate generally goes down.

You mentioned $16k on the truck balance. Over 36 months, that is $444 they need to get. Plus some for the furniture, and some for the trustee, and some for the newer car (if you financed?) and if your atty has the balance of his fee in the plan.

As already mentioned you could ask for a 60 month plan to spread out what you need to pay, if you can't afford to do it in 36.

[SMinGA]

Sorry for the double post. Browser issues...

Sounds like what you are trying to accomplish in the ch. 13 is not working with your income level. Having to pay off $16k on the truck is the difficult thing. Out of curiosity, how long ago did you buy the truck & about what is it worth now?

[momofthree]

How long ago did you buy the truck? Can you cram down the value on it?

[BCA2009]

also, i dont know what has changed, i think we F'd up on the attorney choice, if we could have done a 7 to begin with im sure we would have.but we went from household income of about 6k a month to about 3k and survived the change for about a year then big, unexpected, expenses came and hurt us.

If your monthly income is only about 3K, I can't imagine how you could NOT Qualify for a Chap 7

If you just use all of the standard IRS amounts you pretty much qualify with a 36K per year income. You need to talk to your lawyer again and go thru the means test line by line. I would quit making payments on everything you' re going to give up and save up enough money for a beater car, then file chap 7 and get out from all of your debt and don't be burdened with high car payments on your current low salary.

I'm letting my truck go and looking for a cheap vehicle just to get me to work and back. I'm am so excited about having no debt at all. At first I was going to re-affirm my truck, but at 500 per month plus ins and poor gas milage. I can save $20 per day by giving it up. When I looked at it that way, it was a no brainer for me.

Good luck whatever you decide!