A few questions about vehicles, newbie here.

[Brokecoloreefer]

We are in the begininng stages of filing bankrupcy. I belive my question is simple. We own to vehicles, a 2005 Nissan truck 4x4 and a 2006 Volvo S 40. I understand they are going to take one of the vehicles. I live in a remote area in the mountains of colorado, at about 9000'. The truck is a absolute necessity. The truck has a little equity in it. The volvo is the summer time car, and of course for now that car is upside down. Will they take the truck reguardless of where i live? The truck is the only vehicle that gets around here in the snow in the winter time. Would i be better off trading the truck before i file? If i have two vehicles that are upside down can i chose which one they take?
Thanks so much

[SinkingFast]

I looked at several websites about the Colorado BK Exemptions. From what I've read, you have a $3K vehicle Exemption.

You said "We" are filing. That indicates you might possibly be filing joint?? If that's the case, your spouse could also get the $3K Exemption as well.

The wording does not say the Vehicle Exemption cannot be doubled and is not limited to one vehicle.

As you Consult with attnys, you'll definitely wanna ask them. Unless your equity in the one vehicle exceeds $6K, sounds like you'd be able to keep both vehicles if you're filing joint.

[Brokecoloreefer]

Wow, thanks for the fast responce. I have less then 1000 equity in each vehicle. We are filing joint, she is working from home alittle and needs a vehicle with a new baby and a baby on the way. We were alittle stressed about how we were going to pull that off with one vehicle. Does the vehicle exemption also count against the personal property exemption? In other words, lets say we have a 6k vehicle exemption, does that same exemption count against our personal property?

[SinkingFast]

Sometimes a State will give a lump Exemption amount and the Debtor/Filer applies it however needed. Other States allocate given $$$ amounts for various things. Homestead, personal property, vehicles, etc. Colorado designates exemptions.

http://www.bankruptcyinformation.com/CO_exemp.htm

By some States' standards, Colorado Exemptions are rather generous. You have $3K for personal property. Seperate from jewelry, food and fuel, pictures and books, etc. Many people here have to lump everything into their Personal Property.

[Brokecoloreefer]

So here is what we are comtemplating. I know i should talk to a attourney, and i will, i just want to be informed first. At our currnet income level, we realy cant afford both cars but need two vehicles. Would it be wise to trade them both in for two new, less expensive cars before we file? I think we would still pass the means test, We went from a 80k household net to a 40k household net, with 16k in CC debt, and about 60k in car debt. I would like to reduce the car debt to about 40k total. We have one dependent now (a 14 month old and one more due in may.) After bankrupcy i still dont think we can afford the cars we have, and i dont want to buy new cars afterwards at a obscene intrest rate. I dont know what my score is but it cant be to bad, we were a 750 in november, but we havent made the minumus in two months.

Thank you for the link sinkingfast!

[Brokecoloreefer]

One more question in reguards to vehicles. What would happen if we do a volentary repo on the volvo. Would that effect our BK case and i would assume that the credit hit wouldnt make any difference with the bankruptcy any way....The reason im contemplating this is we cant realy afford the payments right now, and we are about 2k upside down from my best guess, probably more. Buying a used car for 15k doesnt realy help with the cashflow. Our intrest rate would be higher because our scores sunk down to 650, and on a 48 month term it only saves us 80 bucks or so. now i dont know what to do.

My numbers wernt accurate in the beginning of this thread. I called my bank and got my payoff on both. There both upside down.

[BassBoy]

A voluntary repo wouldn't affect your BK case. The car would be sold (auctioned) and the balance due would be included in your BK....done and done.

I'm not sure I'm sold on the idea of taking on any new debt so soon before filing.

What else raises concern is that your scores have dropped 100 points in 2 months......that could catch a lenders attention and they could really stick it to ya (with an outrageous interest rate) or deny you a loan. Yes, 650 is good credit, but a drop that big in such short of time doesn't look good.

[Brokecoloreefer]

My guess the point drop is because of the late payments, and payments less then the minimum. Also i would bet my debt to income ratio effected it pretty good. My avalible credit decreased as well. I was suprised too.
Thank you for the advice.

[LostOne0069]

I doubt very seriously that the court will let you keep a $40k car loan on a $40k salary. I seriously doubt that any attorney is going to sign off on it... and that means that you'd have to have a hearing with a judge to "prove" that you can afford it after bk and that it wouldn't be an "undue burdon".

Besides, a $40k car loan is a HUGE freakn' car payment... I know, I owe about $33k on my Denali that we're keeping.... that $600-$700+ each month your paying on that loan will buy you a pretty good used car fairly quickly... and you can get a new car down the road... once you can afford it.

Think about this a second... you're filing BANKRUPTCY. Any time you hear yourself use the words, "I still won't really be able to afford" then DON'T. Remember, going BK and then getting behind on your bills afterwards is the kiss of death as far as credit goes... if that happens to you, you can forget buying a house or having any sort of decent credit for several years.

Bankruptcy is an opportunity to start over... get rid of the mistakes and go forward with new resolve to not make those same mistakes all over again. Don't waste it.

[Brokecoloreefer]

I hear ya, and in no way am i wanting to keep the car. I thought i could trade it in, but that sounds like a bad idea, which is why im consideing voluntary repo.

they only thing i have holding me back from giving that car back to the bank is the means requirements. The income level here is $62,500 and were well below that. But without that $500 car payment my availible income goes up. But with the amount of debt we have i cant imagine we wont qualify. Expecially with a $1200 mortagage, and no home equity.

[SinkingFast]

Here's a thread for you with links to many informative websites:

http://www.bankruptcyforum.com/showthread.php?t=11356

But here's a really important link for you:

http://www.ca-bankruptcy-attorneys.c...alculator.html

This will help remind you of expenses you probably aren't thinking about. Like, do you buy firewood??!! Do you have a newspaper or magazine subscription??!! You obviously have a computer. Do you use Norton's or Mc Afee antivirus/firewall protection. There's an annual fee. What about printer paper and cartridges. The "nickle and dime", and once a year expenses can really add up.

We were below the Median, no car payments, no house payments. We rent. Our disposable income on Schedule J was $11/mo.

One thing that will help you a lot is to save your receipts. Every time you spend money, stash the receipt in your wallet. When you get home, keep all your receipts collected up together. Go thru them maybe once a week and seperate out your expenses. What's food, what's cleaning supplies, gasoline, etc. Several posters here have set up spreadsheets they enter their expenses on just to keep track.

[Brokecoloreefer]

great advice, thanks again!
I have lots of reading to do, thanks for the links