Some questions before filing

[Mudder44]

We have roughly 100k in credit card debt from medical expenses. We have no savings to speak of, but recently realized that we couldn't continue to pay our credit cards. So for the past couple of months I have only been paying our secured debt, mortagages and such, utility bills and the like. I recently met with a bankruptcy lawyer and we both agreed that Chapter 13 is a viable option....painful as that is to admit.

After reading through some of the threads, I have a few questions.

1). Is it worth saving any money in my savings account, or will they take that upon conclusion of the filing? I may get a couple of thousand back in my income tax refund...will they take that also? I have some repairs on my van that I need to take care of, and our heat pump is out of service. Should I just take the extra cash and do the repairs and then file?

2). Also, the lawyer suggested buying a newer car than the Dodge Caravan we have, which is 5 years old and has 100,000 miles. The van needs new tires and brakes, and is making some strange noises that suggest to me the powersteering may be in need of work. I checked my credit score and it is sitting at 551 right now, so I figured my ability to buy a replacement vehicle is pretty nil unless I agree to a really high interest rate, such as 18% or so.

Any suggestions or help would be most appreciated.

[holycrap]

1). Is it worth saving any money in my savings account, or will they take that upon conclusion of the filing? I may get a couple of thousand back in my income tax refund...will they take that also? I have some repairs on my van that I need to take care of, and our heat pump is out of service. Should I just take the extra cash and do the repairs and then file?

2). Also, the lawyer suggested buying a newer car than the Dodge Caravan we have, which is 5 years old and has 100,000 miles. The van needs new tires and brakes, and is making some strange noises that suggest to me the powersteering may be in need of work. I checked my credit score and it is sitting at 551 right now, so I figured my ability to buy a replacement vehicle is pretty nil unless I agree to a really high interest rate, such as 18% or so.

Any suggestions or help would be most appreciated.

1. it is my understanding (at least in Texas) that you cannot have any money "saved up" at the time of filing. If you do. you will have to declare it and relinquish it.Take whatever funds you have saved up and do your repairs. Then file.

2. Get a new(er) car. The interest rate really doesn't matter. Keep the payment under the allowed amount, 489.00 i think, and you are set.

[Mudder44]

Wife is still worried about the interest rate and such

Perhaps I need to readjust my thinking. You say the interest is unimportant, is that because things are bad enough that you can only do the best you can do? Thinking long term, I argued with her that any car repairs we make on this older vehicle would likely more than offset any additional payment we have to make over a 5-6 year period.

Also, I have am too honest of a person. Since I will have to go with financing the vehicle through the dealer, how do I respond to the question of why I haven't been making payments on my credit cards that that past two months. Do I just say that I am in the process of renegotiating lower interests rates with my lenders....obviously the last thing I want to do is tell them I plan on filing Chap 13. Then again, maybe they won't ask, but if I was in their position, I sure would. I wanted to buy a Honda for about $18K, something I am sure will last for several years with lower chances of requiring repairs. Would a Honda dealer be willing to refinance someone in my position, or am I stuck going to a smaller dealer with the local bank financing?

BTW, just for information, I live in Washington State. The exemption is $2500 on the auto, which I believe means that it can't have more than #$2500 of equity in it, right? WIth my credit, I don't think I have much to worry about there. I owe as much on the Dodge as it is worth, so no equity in the trade-in really.

[holycrap]

Perhaps I need to readjust my thinking. You say the interest is unimportant, is that because things are bad enough that you can only do the best you can do? Thinking long term, I argued with her that any car repairs we make on this older vehicle would likely more than offset any additional payment we have to make over a 5-6 year period.

What i mean is that when you figure your expenses with your lawyer a payment of ~500.00 is an allowable expense. Whether it is your old car or a new car. You are best served by having the newest car possible when beginning a 5 year program. There are allowances for car repairs in a ch13 budget, wouldn't it be nicer to have a car that would actually NOT break down.