My 1998 Jeep Cherokee and I had a pretty rough holiday season. Luckily, we came out of it a little wiser about cost-saving car maintenance tasks. As a friend of mine in the car business says, You make monthly payments on any car you get—with an old car, its just in repairs and extra maintenance.” True enough. As hard as it is to set aside funds for ongoing repairs and maintenance, it can save you from expensive, unexpected repairs like I just had. Keep these in mind:

1.    Fluid check frenzy. Even those of us who aren’t car savvy can learn to check fluid levels regularly; including oil, coolant, power steering and transmission. 2.    Oil changes, baby. Most experts recommend having your oil and filter changed every 3,000 miles or 6 months. Look online for the specific recommendations for your ride. 3.    Totally tires. Stay on top of tire alignment, pressure and wear by checking the pressure once a month and replacing tires if the wear bars are flush with the surface of the tread. 4.    Ooh la la air filters. These need to be changed out every couple of months to about a year, depending on where you drive. 5.    About auto transmission. Staying on top of your automatic transmission can save you from transmission failure (yikes)! Experts recommend changing the fluid and filters every 25k to 30k miles. 6.    Coolant craze. Most vehicle manufacturers recommend changing coolant every 2 to 3 years or 30k miles. Side note: Watch for sinking levels, which can mean a leak. 7.    Brake for brakes. Have your mechanic check your brakes at least once a year. As for brake fluid, check it regularly and have it changed every 2 to 3 years. 8.    Go fuel filter. Changing it every 30k miles is the standard; a new filter can cost just $20 and save you from thousands of dollars in damage.

These are a few tips to start with; you can get more in-depth and expert info. from Car Talk and edmunds.com.  Remember that choosing a good, honest mechanic is an important part of staying on top of preventative maintenance—online reviews and referrals from friends are a good place to start.

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Here’s a relatively simple, but common, question I was asked by email this past week. The writer makes payments on his daughter’s car titled in his daughter’s name. The writer (the parent) wants to file Chapter 13 bankruptcy and asks whether his monthly payment for his daughter’s car can be included in his expenses so as to reduce the amount of his monthly Chapter 13 plan payment.

The answer depends upon whether the parent signed the loan. If the parent co-signed the daughter’ s car loan then the parent may include as an expense the loan payment, maybe. The Chapter 13 trustee may challenge inclusion of the secured loan for a car which the parent does not use and which is not necessary. The extra car should not be paid for, in effect, by the debtor’s unsecured creditors. If the debtor’s plan pays 100% of his creditors then the car payment on the daughter’s car should not be a problem.

If the parent did not co-sign the loan then the parent’s monthly payment is in effect a gift to the daughter. The debtor cannot include the gift as an expense because the debtor has no legal liability of payment. Even if the debtor proposes a 100% repayment plan the Chapter 13 trustee may disallow the “expense” so that the creditors are paid back in shorter time.

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A few years back, before you can apply for a car loan, or any type of loan, you have to undergo a tedious evaluation and application process that may even take a week to finish. Not anymore. Today, the car loan process has been simplified so much that it has cut off the old loan procedure by almost eighty percent. Let us take a look at how UK car loans online have been made uncomplicated.

Because of rigid competition, many car loan companies have employed many strategies to make their loan procedures more appealing to the public. They have provided a great number of additional amenities and benefits to the consumers in order to match every customer’s needs and wants. If you have good credit rating which means you belong to the low risk credit bracket in terms of credit worthiness, then you would certainly have no issues with applying and getting a good car loan deal. In fact, you would even be asked to provide collateral or even put up a large down payment because your credit history says it all.

Bad credit car finance online:

However, if you have problems with your credit history and your credit rating is shot, do not fret because you can still get a car loan through UK car loans for people with adverse credit. These car lending companies do not use the credit report of an individual as a basis for providing a car loan, yet they still require other prerequisites like proof of employment for the past twelve months, a considerable amount of down payment, or collateral. And if you still cannot provide these, there are still a great number of bad credit car lending firms that specialize in providing other loans for different income groups, matching their current financial circumstances.

Now all these processes are made even simpler by the fact that you can search, compare, choose, apply, and obtain UK car loans online. Gone are the days when you have to enter a lending office, inquire about their car loan options, fill up a car loan application form as thick as a college exam, submit it, wait for it to be assessed, be interviewed, wait again for approval, and then be told whether the loan was approved or not.

Nowadays, you are able to search and match car loan options in the comfort of your home. You can even use their online car loan calculator to determine up to the last penny how much you will be paying each month based on a number of factors.

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The U.S. Supreme Court issued a decision on January 11, 2011, making it more difficult for debtors to pass the Chapter 7 means test. The means test includes two car related deductions from income. Debtors may be eligible to deduct from income an allowance for car-operating costs and a separate allowance for car-ownership costs. The amount of the debtors allowances are based upon published table of National and Local Standard as well as their actual expenses.

The Supreme Court case involved the means test filed by a debtor who owned a car free and clear of any debt and liens. The issue in this case was whether such debtor can claim the car-ownership allowance when the debtor has no monthly car payment and his only car expenses are those related to car operations.

In the past, many attorneys, myself included, claimed both a car-operating and car-ownership allowance even through the debtor had paid off his car or leased a car. The car-ownership allowance (a bonus deduction for debtors without car payments) frequently was the deciding factor in the debtors eligibility for Chapter 7 bankruptcy.

The U.S. Supreme court held that debtors who have no monthly car payment cannot use a car-ownership allowance in the means test. The Court decided that the means test allowed “applicable” expenses, and that debtors without a car payment did not have an “applicable” ownership costs.

The decision encourages prospective bankruptcy debtors to buy a new car with a car loan prior to filing bankruptcy in order to pass the means test, and to this extent, the decision makes it more difficult for debtors to get a “fresh start” after their bankruptcy case.

Ransom v. FIA Card Services et. al. Case No. 09-907

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I had two trustee meetings today with clients who acquired new cars not long prior to filing bankruptcy. Both debtors got help from more affluent family members to get their cars, but the two debtors and their respective families chose different ways to title the car and structure the transaction. Debtor Number One was driving a new car paid for by his father when he filed bankruptcy.. His father purchased the car in his own name for cash and then gave the car to his son, the debtor, to use. Debtor Number Two borrowed money from his brother in law to purchase a new car before bankruptcy. Debtor Two purchased the car with the brother in law’s money prior to filing and shortly after filing bankruptcy he recorded a lien on the title in favor of his brother in law.

Debtor One keeps the car. Debtor Two loses the car. Because the lien on Debtor 2′s car was recorded after the bankruptcy the trustee can avoid the lien and treat the car as owned free and clear by Debtor 2. Debtor One keeps his car because even though this debtor drives the car exclusively, pays for gas, repairs, and insurance, the car title was never in the debtor’s name and the debtor never had legal title.

The morale of this true story is that if a family member wants to help you out getting you a car before you file Chapter 7 bankruptcy have the family member title the car in their name. After you file the petition the same family member can gift the car title to you. Alternatively, if the family member does not want the liability of ownership he can loan you money for your car, but make sure the family member puts a lien on the car at the same time you buy the car (just like a bank would do).

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I went to a trustee meeting last week with a single debtor who owned a car free and clear. The car blue book value was $10,000. The debtor said the car “needed work” and that she had a repair estimate of $3,000. I looked at the estimate and most of the items were normal maintenance- new plugs, new belts, brake job etc. There was a single scratch on the exterior. In the debtor’s best case, this car had approximately $6,000 non-exempt equity which amount the bankruptcy trustee could demand from the debtor. 

Before the meeting, my client was very upset about her car. She was unemployed. She lived with a family member who also was unemployed. She had no money and no prospect of future employment to buy back the non-exempt car equity from the trustee. Without a car, she said she had no way to look for a job or to go to a job if she found one. Things looked bleak- I explained that the trustee is not a bad person who is only doing his job by going after the $6,000 car equity.

 So, the debtor tells the trustee about why she filed bankruptcy. She had to quit her job because she was being stalked by a neighbor and because her mother was very ill. She moved in with a relative because she had no money. She used credit cards to survive. Employment prospect were bleak in her home town.

The trustee never mentioned the car issue. The debtor had previously given the original car title and a picture of the car to the trustee. The trustee handed the debtor the car title without comment. The trustee left the meeting and drove home in the car. The trustee is very experienced and competent; he knew about the car equity. This debtor who had suffered a series of personal misfortune got a big break at the trustee meeting, and I don’t know why. Sometimes in bankruptcy you just get lucky.

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