??? Should I purchase a NEWER vehicle before filing

[BBNLB]

I have my first meeting with attorney monday, I'm thinking we will be filing chapter 13. But I'm not sure if the attorney will be able to LEGALLY answer this question.
I have a truck that is paid for, IO zero. It's value is approx. 10k and has alot of miles on it so should I trade this in on a newer truck before I file and my credit is totally ruined OR will they see this and come take it back, and then I'm out the 10k AND a vehicle.

[momofthree]

It depends on your state exemptions on whether or not you can exempt $10k value in a vehicle. Whether you trade it in or keep it, you'll end up with that $10k needing to be exempt. Your BEST bet is to sell it for cash, put a small amount down on a new vehicle (hopefully just pay taxes & fees), and spend the rest on allowable living expenses before filing--things like home repairs, needed medical/dental/vision, stock up on groceries, pay a year's worth of car insurance, etc.

[lrprn]

I have my first meeting with attorney monday, I'm thinking we will be filing chapter 13. But I'm not sure if the attorney will be able to LEGALLY answer this question.

Just curious.....why do you think the bk attorney won't be able to answer any question you have regarding your car and filing bk?

I have a truck that is paid for, IO zero. It's value is approx. 10k and has alot of miles on it so should I trade this in on a newer truck before I file and my credit is totally ruined OR will they see this and come take it back, and then I'm out the 10k AND a vehicle.

As mo3 states, what's best to do in this situation depends on your state's bk exemption for autos and if your state has a 'wildcard' amount that you can use for anything. Which state do you intend to file in? We can help you sort out how much can be protected on your truck.

Whether you should trade in or not before filing depends on your entire financial picture and your state's exemptions. Don't do anything before getting sound legal advice about this situation from at least 3-4 different experienced bk lawyers in your area during your free initial consultations.

Some advice - don't go with what just one bk lawyer tells you. Bk law is often riddled with gray areas - especially Ch 13 law - and it helps a lot to hear several opinions to see where the majority of legal opinions fall. It's also a great opportunity to find out if there are any other sticky issues with your filing besides getting an answer to your question about your truck.

[NeedOptions]

Does it matter if I sell my soon to be paid off car to my mother? That way I can get out of the car and buy a new one. Once again I haven't filed for bk13 yet and have not missed a payment on anything. I do plan on filing in 6 months.

[lrprn]

Does it matter if I sell my soon to be paid off car to my mother? That way I can get out of the car and buy a new one. Once again I haven't filed for bk13 yet and have not missed a payment on anything. I do plan on filing in 6 months.

As long as you sell the car to your mother for its full current fair market value (not just what is left on the loan), it should be fine. Check with at least 2-3 experienced bk lawyers in your area during your free initial consultations to be certain before doing it though.

Assuming you are going use the entire cash proceeds from the sale to buy a new car, you need to be sure you can completely protect the new car with your state's bk exemptions. How much car equity you can protect is another great question to ask during your free initial consultations.

[NeedOptions]

That's the issue. I just plan on giving my mom the car as a gift. Would that be an issue? Once again, all my debts are current as of now and I haven't technically decided to declare bk yet. I asked about the wildcard exemption in CA and it is $25k.

[lrprn]

That's the issue. I just plan on giving my mom the car as a gift. Would that be an issue?

DO NOT GIVE THE CAR TO YOUR MOM!! The bk court will interpret that you tried to hide an asset (whether that was your intent or not). That is an insider preference and the trustee will go after the car to seize it and sell it to pay your creditors. Your mom will have to give the car up. Worst of all, your bk could be thrown out as well because of the fraud finding. Obviously this is a very bad thing! Don't do it!

[NeedOptions]

Thank you lrp. I definitely will not give it to her. Am I allowed to have 3 cars going into a bk13? My wife and I are the only drivers. I have a lease now, and plan on purchasing 2 new cars as my wife's car is scheduled to be paid off in 3 months. We were thinking about trading in my wifes car for a new one, I would buy a car for me, and the leased car would be driven by my sis in law and paid for throughout the 5 years in Ch. 13. Is there a limit of cars that i can keep?

[Lissy]

To the OP, I think another question you need to ask yourself is whether you think your truck will last another 3-5 years. If it won't, understand that in order to get a new vehicle while in a Chapter 13, you will need trustee approval. And once your credit takes the hit, you may find yourself either unable to get financing on a new car or you'll be paying outrageous interest on the loan. Take it from me! I'm currently going through this, as my car was totaled in an accident 3 weeks ago. I am now going to pay 18% interest on a new car and my loan for my totaled car was a 0% interest. That hurts. A lot. But my credit is in such poor shape now that I don't have any other options. There is nothing wrong with buying a reliable car before you file for Chapter 13. You'll need it to last you the 3-5 years.

[SMinGA]

I see a potential problem here: you'd need to explain why you are making 3 car payments for 2 drivers. (Assuming your sis-in-law is not your dependent.)

Thank you lrp. I definitely will not give it to her. Am I allowed to have 3 cars going into a bk13? My wife and I are the only drivers. I have a lease now, and plan on purchasing 2 new cars as my wife's car is scheduled to be paid off in 3 months. We were thinking about trading in my wifes car for a new one, I would buy a car for me, and the leased car would be driven by my sis in law and paid for throughout the 5 years in Ch. 13. Is there a limit of cars that i can keep?

[NeedOptions]

I agree. I have decided to keep the lease and buy my wife a new car. We will only have two cars before I file for Ch. 13.