Selling exempt property before filing

[nc73]

If I sold a car that would have been exempt anyway, worth 8k, can I keep the cash? It would go towards necessities, bills, before filing in January. I may sell the house too at some point, probably after filing. When I asked my lawyer she just said yes I could sell it but I didn't ask who would get to keep the money. I'm in Texas btw.

[lrprn]

If I sold a car that would have been exempt anyway, worth 8k, can I keep the cash? It would go towards necessities, bills, before filing in January. I may sell the house too at some point, probably after filing. When I asked my lawyer she just said yes I could sell it but I didn't ask who would get to keep the money. I'm in Texas btw.

Here are your Texas exemptions - http://www.bankruptcyinformation.com/TX_exemp.htm

Also in TX you can use the federal exemptions instead of TX if you wish - here's the federal exemptions - http://www.bankruptcyinformation.com/exemp-fed.htm

It can be risky to turn an exempt asset (your car) into a potentially non-exempt asset (cash). In Texas I don't see any specific language in the exemptions about how much cash you can have on hand and protect when you file. The federal exemptions protect $925, and if you don't need to use all of the homestead exemption, up to $8,725 more.

If you are going to spend this $8K before you file, then make certain that you use the money for legitimate and reasonable family expenses. Keep receipts for EVERYTHING in case the trustee wants to know where the money went.

One thing you may not have considered....if you are filing in January, selling your car now for cash is going to add $8,000 to your 6-prior-months income calculations. Will you still be under the TX median for your family size if you add the $8K?

[nc73]

Here are your Texas exemptions - http://www.bankruptcyinformation.com/TX_exemp.htm

Also in TX you can use the federal exemptions instead of TX if you wish - here's the federal exemptions - http://www.bankruptcyinformation.com/exemp-fed.htm

It can be risky to turn an exempt asset (your car) into a potentially non-exempt asset (cash). In Texas I don't see any specific language in the exemptions about how much cash you can have on hand and protect when you file. The federal exemptions protect $925, and if you don't need to use all of the homestead exemption, up to $8,725 more.

If you are going to spend this $8K before you file, then make certain that you use the money for legitimate and reasonable family expenses. Keep receipts for EVERYTHING in case the trustee wants to know where the money went.

One thing you may not have considered....if you are filing in January, selling your car now for cash is going to add $8,000 to your 6-prior-months income calculations. Will you still be under the TX median for your family size if you add the $8K?

Why would the proceeds from the sale be income? That was money that was after tax. I could understand if I got the car as a gift it would be income. Time to talk to my lawyer i suppose. thanks!

[CindyLou]

yes, it WILL be income!!!!!! you could, however sell it the day AFTER you file and you would be fine. That is if it is exempt and again you will need to keep meticulous receipts on how the money is spent just in case.

[nc73]

yes, it WILL be income!!!!!! you could, however sell it the day AFTER you file and you would be fine. That is if it is exempt and again you will need to keep meticulous receipts on how the money is spent just in case.

i guess my lawyer was BSing with me? granted she never said it wouldn't be considered income. although she should have known that it would have put me much higher than the median income for Tx. i may not find a buyer AFTER i file. my car is rare and only a small a group of people know of it's existance. my buyer is from Cananda.

[nc73]

Thanks everyone. confirmed that it will be income. I am SOL...

[nc73]

Good news! Talked to the lawyer folks today and they said yes it is income but it can be exempt up to 24k. So I am good to go. I was getting wrong info from someone in the same office, they said I'd have to wait six months.