Automobile Questions

[IvoryAngel]

Hello, first I would like to reiterate my vehicle situation. I make monthly payments of 220$ to Nissan Credit for the vehicle I drive. The lien is in a friends name who sold me the car. Mutual agreement I could of never gotten the interest rate he does at 1%.

He informed me today that I only owe 2000$. He said about 9 payments. But I pay more than the amount due. I agreed to pay the 220$ regardless of the invoiced amount so more goes to principle that way. I am sure it will be less than 9 payments because of that.

Recently I quit my 8-5 job to work full time from home. Well I went from making 2200 a month to 500 a month. Hopefully in the next month or so things will pickup and I will go back to bringing home at least 2000. I have been thinking about filing since at least December or so. Haven't done so because I am having trouble getting all the necessary paperwork together.

My question is how would it affect me if I paid the car off before or after bankruptcy? Would they make a big deal about it? I would really like to pay it off so it can be in my name before all of this goes down you know. I just dont want to do anything in haste.

[keepmine]

What is the car worth and how much equity in an automobile does your state exempt?

[IvoryAngel]

What is the car worth and how much equity in an automobile does your state exempt?

The bluebook value is about 7000-8500. Equity I am not sure. I live in Oklahoma, where can I look that up?

[keepmine]

looks like $3K.

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

[DeadManCrawling]

You may be in danger of actually LOSING the car, believe it or not. If you have equity of 7-8k and the state exemption for Oklahoma is 3k, you owe your BK estate 4-5k, cash, usually within 30-40 days.

HOWEVER-----there are other exemptions that may apply, and you could be in the clear. For instance if OK has a Wildcard exemption or personal property exemption that is applicable. I would certainly check this before you pay any more than the base payment.

You could pay off the car, doing the right thing by your friend, only to see it taken away-with you losing the money you spent to your friend AND the car.

Likely there is one way or another to exempt it. The scary scenario above is just to alert you to be careful.

Also if you are paying only your friend on the "verbal agreement" he may not have standing in court-if you are not paying any other creditors. It might be considered preferential treatment. HOWEVER-another one-if the car is titled in HIS or HER name, they likely can't touch it anyway.

[CindyLou]

my advice. DO NOT DO ANYTHING until see an attorney. It sounds like it would NOT be a good idea to pay off your car!! Us that money for your attorney. You want to keep your car protected. go to edmunds.com and do an appraisal on your car based on the miles, condition, etc. Chances are the value minus what you owe will be close enough to your exemption to be able to keep your car. Plus, why would you want to prepay a 1% loan????

[SinkingFast]

Is the car titled in friend's name???

[IvoryAngel]

Confused

Ummm, the vehicle is in his name. If some of you are reading this more than once I am sorry. The car is in his name. He originally purchased the vehicle for his daughter who did not make the payments so he reposed it from her and put it up for sale. No one wanted it because while his daughter had it she put some miles on it. She got it brand new off the lot. I got it about a 16mths or so later. The offer was that I make the payments until paid off because I do not have as good of credit as he does. I couldn't go buy a car with 1% interest you know. So he and his wife being as kind as they are agreed to sale me the car. I have been making my payments as agreed for two years are better now. Initially "WE" me and attorney thought they would make me give him the car back and he would have to pay me back all the money I have paid into the car. I know the legalities about the way he sold me the car because technically he sold a car still under lien etc. But the attorney said it was okay because the payments are minimal. WHEWWW!! So anyway with it being close to the end of the note I thought it might be a good idea just to pay for it and file after wards. Or vise versa if allowed. My bankruptcy will only cost me 800.00 total so its not extreme. I have not paid any bills except living expense bills rent, utilities, etc. Will extreme drop in income I have no choice. Reminds me of being a full time student again. lol So you guys think it would be a bad idea? If I did pay it off how long would I have to wait to file Bankruptcy for them not to take my car away? I guess I dont understand this part of it.

Confused!

[bezoar]

Oklahoma's vehicle exemption was increased to $7,500 about the time that I filed in 2005 - as I posted here:

http://bkforum.com/showthread.php?t=270

My GF & I both kept our cars w/o problem. Mine was valued @ $5,500 - hers around $7,500.

Do you have a written agreement with your friend regarding payment, since it is in his name? If you're not on the title, you really don't have any ownership until he conveys the title to you. Sounds like it could be a little sticky. Hopefully your lawyer knows what he/she is talking about.

What is the year/make/model of the car? The OKC Fed BK court uses the average of the NADA retail and the NADA wholesale price - at least they did in late 2005. NADA is always priced considerably more than "real world" prices - probably so a car dealer can show you how great a deal you're getting compared to NADA prices. ;)

I'm also in OKC. You're welcome to PM me if you have any "local" questions although most of my experience with the local court is from about a year & a half ago.

[IvoryAngel]

Oklahoma's vehicle exemption was increased to $7,500 about the time that I filed in 2005 - as I posted here:

http://bkforum.com/showthread.php?t=270

My GF & I both kept our cars w/o problem. Mine was valued @ $5,500 - hers around $7,500.

Do you have a written agreement with your friend regarding payment, since it is in his name? If you're not on the title, you really don't have any ownership until he conveys the title to you. Sounds like it could be a little sticky. Hopefully your lawyer knows what he/she is talking about.

Yes we have a written agreement or contract. The sale was handled just like I would be making payments to him and not to Nissan. You are right when I first told the lawyer he bout fell out his chair, he immediately starting rambling about he shouldn't of sold me the car that way. And all the legalities. Honestly, I understand all the what if's so does the guy who sold me the car. Realistically he put his neck out there too by doing it this way also. As I explained to the attorney believe it or not there are still GOOD people in the world at the time my son was 4 and I had a van with no air conditioning and the internal temp had to be well over 150degrees on any given day and we would literally poor sweat driving just up the street. It was dangerous for me and him. And no chance of affording repairs. I worked with this guy and he drove the car to work and I asked him jokingly why he didn't tell me he had a car for sale knowing I needed one. We talked it over and he talked it over with his wife. A couple of days later he gave me the keys to the car. Definitely a blessing from God! Now, I have a new car well taken care of and will last me many many more years with proper upkeep. And excellent air conditioning I might add. =) Respectfully he has done me right and therefore I will do him right.

What is the year/make/model of the car? The OKC Fed BK court uses the average of the NADA retail and the NADA wholesale price - at least they did in late 2005. NADA is always priced considerably more than "real world" prices - probably so a car dealer can show you how great a deal you're getting compared to NADA prices. ;)

Its a 2003 Nissan Sentra I believe XE is the sub and around 90000 miles.

I'm also in OKC. You're welcome to PM me if you have any "local" questions although most of my experience with the local court is from about a year & a half ago.

I appreciate the offer. Sometimes I think all the information is overwhelming. I still dont understand the exemption part. Are you saying they give a standard and you subtract your value from that etc? Can you explain that in detail. Sorry for not knowing. I am slowly getting this.

[DeadManCrawling]

I appreciate the offer. Sometimes I think all the information is overwhelming. I still dont understand the exemption part. Are you saying they give a standard and you subtract your value from that etc? Can you explain that in detail. Sorry for not knowing. I am slowly getting this.

Exemptions are your best friend in BK, my opinion.

You may consider your car worth 7k (based on Bluebook or whatever). If you need to lower that for some reason, to get below the cap, here's what my attorney advised:

Take it to a few Buy Here Pay Here places and tell them this kind of stuff-without ACTUALLY selling the car of course:

In our case, its a little sports car, so we might say to the sales guy:

"We need to unload this piece of junk FAST. We're short on cash. I know this ain't worth much, as it has high miles and the brakes are bad. The accident of course, wasn't terrible, but you can see the nick in the door and the metal's rusted. I suppose you won't give us much for something like this, and also the top leaks a bit where the seal broke. The engine didn't USED to rattle like that. That just started last week. So what you wanna pay us-CASH-RIGHT NOW-for it."

Think he's gonna offer high? No way. Make him put it in writing.

Theres Appraisal #1.

Get two more in the same fashion.

The car in our case, above, by the way, is a 2000 BMW Z-3 convertible in very pristine shape, but each of the material facts about the car, while true, has been magnified to acchieve the "fire sale" or "garage sale" pricing the attorney says is appropriate here.


THERE is your value for exemption purposes.

Now, you might fit EVEN MORE into your exemptoion without passing the cap. If that's possible. No idea if you could exempt say, 7 cars all worth 1k or less each.
Or what about 15 cars all worth $500? Sounds more like a used car lot but I wonder if they would allow it. On the other hand, what the heck is the trustee gonna do with em?

[jal1129]

Keep in mind that what works for getting exemption values with one trustee/district does'nt work in all districts. Each district/state has thier own ways of determining values, your attorney can let you know the best way to value for your district. Also in addition to the $$ exemption many states also have limits on the amount of cars per household/driver.

[IvoryAngel]

Exemptions are your best friend in BK, my opinion.

You may consider your car worth 7k (based on Bluebook or whatever). If you need to lower that for some reason, to get below the cap, here's what my attorney advised:

Take it to a few Buy Here Pay Here places and tell them this kind of stuff-without ACTUALLY selling the car of course:

In our case, its a little sports car, so we might say to the sales guy:

"We need to unload this piece of junk FAST. We're short on cash. I know this ain't worth much, as it has high miles and the brakes are bad. The accident of course, wasn't terrible, but you can see the nick in the door and the metal's rusted. I suppose you won't give us much for something like this, and also the top leaks a bit where the seal broke. The engine didn't USED to rattle like that. That just started last week. So what you wanna pay us-CASH-RIGHT NOW-for it."

Think he's gonna offer high? No way. Make him put it in writing.

Theres Appraisal #1.

Get two more in the same fashion.

The car in our case, above, by the way, is a 2000 BMW Z-3 convertible in very pristine shape, but each of the material facts about the car, while true, has been magnified to acchieve the "fire sale" or "garage sale" pricing the attorney says is appropriate here.


THERE is your value for exemption purposes.

Now, you might fit EVEN MORE into your exemptoion without passing the cap. If that's possible. No idea if you could exempt say, 7 cars all worth 1k or less each.
Or what about 15 cars all worth $500? Sounds more like a used car lot but I wonder if they would allow it. On the other hand, what the heck is the trustee gonna do with em?

LOL that is funny. I guess that could work. So, I am responsible for getting estimated values? But still the question is still what would happen if I paid car off before filing or after etc?

[bezoar]

The OKC court uses NADA. Don't know what your vehicle options are, but retail shows around $7,200, wholesale $5,625. The court averages the two together to get the value of the car for their purposes, or: $6,413. If you don't have an automatic transmission, it's worth a little less.

If you owe $2,000 dollars on the car, you'd subtract that from the value: $4,413 - that's the amount of your equity as far as the BK court is concerned. So you are well under the equity exemption by about $3,087. Even if you pay it off (which I'm not sure would be a good idea - check w/ your atty) you're still in the clear exemption wise by about $1,087.

http://www.nadaguides.com/default.as...120&da=-1&nx=1

Be sure to ask him what he thinks before you pay off the car.

[IvoryAngel]

The OKC court uses NADA. Don't know what your vehicle options are, but retail shows around $7,200, wholesale $5,625. The court averages the two together to get the value of the car for their purposes, or: $6,413. If you don't have an automatic transmission, it's worth a little less.

If you owe $2,000 dollars on the car, you'd subtract that from the value: $4,413 - that's the amount of your equity as far as the BK court is concerned. So you are well under the equity exemption by about $3,087. Even if you pay it off (which I'm not sure would be a good idea - check w/ your atty) you're still in the clear exemption wise by about $1,087.

Be sure to ask him what he thinks before you pay off the car.

Thanks for the link ~ I went thru the questionaire and got these amounts $5,400 $6,975 I think proably the only different is that it is Standard Transmission no Automatic. Its odd how all of these things can work against you even though you think you are doing something right. UGH! I guess if I look at it the other way around technically I could be using that 2000 to pay my other bills I guess. Even though the attourney said it would be okay I would rather not take the chance and leave the car in the "FRIENDS" name. I would prefer all of this happen while its in my name. Just in case they get a wild hair and say give it back. I know almost a year ago I got a ticket and the Judge questioned the sale of the vehicle. I knew then it could be an issue depending on the situation. I guess I have just been Blessed enough to get the car and that nothing has happened while I have had the car. I sent my attourney an email hopefully he will respond on Monday. The whole is overwhelming. I didnt relize how hard all of this was until now. There is alot of stress involved with getting everything together etc. In free time I gather debit information to not have to get it all at once. And to think that I thought I had hardly any debit. UGH! Thanks again for the help. I appreciate it alot. There should be a class on bankruptcy someplace that you could take and learn. I have read alot of the post here and learned alot however some of it is still a mystery to me.