Is this accurate?

[buffalopc]

I guess i'm in a similar boat as several people on here; I am not the one who opened accounts and charged up existing ones, but i'm the one left with the responsibility. Credit (unsecured) debt is about 30k, student loans around 80k (likely i'll never pay those down, sigh). The one thing I did right was I paid cash for a car two years ago, so I own it outright, my only asset (no real estate, etc.). The car, according to the lawyer I consulted, has a value of about 7k. This is the one thing that apparently is holding me back from a chapter 7. Lawyer says to either go for chapter 13 (not sure how I would afford that on top of rent, etc.) or just "do nothing", with worst case being wage garnishment (not a good idea, since according to him, it would be even more than chapter 13). I'm frustrated. My only asset is also necessary for my work and I live a spartan life as it is. I make 30k a year and my student loans will be about 500 a months once they leave deferment. Should I find a different lawyer?

[Flamingo]

It is what it is. If your facts stated above are correct, you will be advised the same by another attorney. You can't pick and choose when it comes to filing as you are finding out. The new law makes it much harder to file Chapter 7 and pushes people into Chapter 13s. You can always have another consultation with another attorney to see what he/she has to say.

[buffalopc]

Ok, he also said I can do chapter 13 for 2-3 years, until the car depreciates to the exemption level here ($2400), then swicth to chapter 7. Correct? Thank you for your input!

[diviaruba]

The one thing I did right was I paid cash for a car two years ago, so I own it outright, my only asset (no real estate, etc.). The car, according to the lawyer I consulted, has a value of about 7k. This is the one thing that apparently is holding me back from a chapter 7.

Not to be flippant, but in the context, it seems that that is something you did wrong. If the only thing holding you back from the 7 is the equity in the car, sell it, use the proceeds to pay your attorney, other bills, etc. and finance another reasonably priced car. What is the auto exemption where you live?

[diviaruba]

Ok, he also said I can do chapter 13 for 2-3 years, until the car depreciates to the exemption level here ($2400), then swicth to chapter 7. Correct? Thank you for your input!

OK, just saw your response. Sell car, put $2400 down to buy a financed car, or just lease, and use the proceeds to stay afloat until you can file. Stop paying unsecured debts, keep current on the student loans, pay attorney, get things done that need to be done.

What is your exemption for cash or your wildcard (non-auto)?

[buffalopc]

I'm in NY State, doesn't look like much of an exemption:

Automobiles

One motor vehicle in the amount of $2,400.

Other Property

All stoves, food, and necessary fuel for 60 days; one sewing machine; family Bible, family pictures, and school books; other books not exceeding $50 in value; church pew; certain domestic animals not to exceed $450; clothing; household furniture; one refrigerator; one radio receiver; one television set; crockery, tableware and cooking utensils; a wedding ring; a watch not exceeding $35 in value; necessary tools, furniture, and equipment for a trade or business not exceeding $600 in value.

[buffalopc]

With the student loan payments and then a lease payment (which, quite honestly, I doubt they'd give me), increased insurance, I wouldn't be any better off than chapter 13. Appreciate your suggestion though.

OK, just saw your response. Sell car, put $2400 down to buy a financed car, or just lease, and use the proceeds to stay afloat until you can file. Stop paying unsecured debts, keep current on the student loans, pay attorney, get things done that need to be done.

What is your exemption for cash or your wildcard (non-auto)?

[epiphany]

With the student loan payments and then a lease payment (which, quite honestly, I doubt they'd give me), increased insurance, I wouldn't be any better off than chapter 13. Appreciate your suggestion though.

OMG. I just looked up the exemptions in your state and they truly do suck.

But you are well below the median in your state. Median income for NY for a single person is 43, 000 and some change. http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm

So, if truly the only asset is your car valued at 7K, I don't see how they could take it. I could be wrong, but am thinking that maybe you could at least expempt 5K or it as a tool of the trade?

Good luck to you.

ep

[diviaruba]

With the student loan payments and then a lease payment (which, quite honestly, I doubt they'd give me), increased insurance, I wouldn't be any better off than chapter 13. Appreciate your suggestion though.

In New York, you may also exempt $2500 in cash, if you are not using a homestead exemption.

[deafbroke]

I'm no expert but there also may be a time limit to consider in selling the car and filing chapter 7. If they think you sold it to specifically file chapter 7 it might cause problems. I'm not sure though.

DB

[danaf]

With what you make, financing a new car might be counter-productive to filing. But if you sell your car, use some money for lawyer, use some for paying bills, exempt 2500, and then buy the best reliable beater you can find for 2k - you could be ok. I know it's not the best scenario especially being upstate where you need reliable transportation BUT - a 13 in your circumstance would suck. Or you could take your chances and file and hope, as another poster said, you could exempt 5k on the car as tools of the trade, and then add in another 2k from the 2500 exemption. An attorney in your area would know best about this. Or hey - you could always move to Texas. They can't garnish wages there and maybe you'll find a higher paying job than upstate NY.....

[FreshLikeADaisy]

Hrm.

$2400 automobile exemption.
$2500 unused homestead wildcard.
------
$4900 possible exemption for vehicle (assuming all your other belongings fall within other exemptions).

AND,

$7000 (current estimate)
$4900 (total possible exemption)
------
$2100 (difference you still need to bridge for Ch7)

That's really not much.

My own suggestion, before you go any further, is to make sure that your atty has actually obtained the lowest possible *acceptable* estimate of the vehicle. Get as many online estimates as you can find. You can go online and do an online estimate at kbb.com (Kelley Blue Book) or NADA, list your vehicle and accessories honestly, and you may come up with something lower than your atty did. The reason I say this is because kbb had my beater valued at $3500 and change, and NADA had it listed for $2000. That's a $1500 difference just to start. Which do you suppose I went with?

If you car is in need of repairs or in generally "fair" or "poor" condition, you can use that to lower the declared value of the vehicle as well, just be scrupulously honest about what repairs it really does need and subtract a conservative figure. For instance, my beater needs the brakes redone and a new set of tires: I knocked off some $300 for that, which was very conservative but also very legit. I never heard a word about it from the trustee, who also had a copy of the title, a copy of the insurance declaration page, and even had me take a picture of the vehicle. He could have asked for a ride around the block, and it STILL would have been a beater.

There is no legal or moral problem with declaring a lower than expected value of an asset, it just has to be legitimate and documented. Also, if you can lower the value, you have the right to pay the difference. For example, let's say you were able to find a better estimate at $5500, the car is in good nick, and you need no repairs. So you list the car on Schedule B (your assets) with a value of $5500, and you list both the abovementioned exemptions on Schedule C for a total of $4900. There's an $600 difference now, which gives you the option of paying the trustee $600 to keep the vehicle, and he applies the $600 to the bankruptcy estate. Since you won't be paying unsecured debt like credit cards while in bankruptcy, and your student loans may be placed into forebearance during the bk (or you could proactively do that now) you could conceivably come up with $600 and keep your car just fine.

So one way you might handle your current situation is, once you find the estimate you like, print out a couple of copies for backup, document on those same pages (I wrote mine in the margins) the condition and any repairs it might need with the $ amount you are deducting for same, and then tell your atty you need to list an adjusted value for it and why. Bring a copy of your printouts to the 341 and give one to your atty too. You should have no problems.

Even if your car really is worth $7000, and all you can exempt is $4900, that's still only $2100. I'm still pretty certain that you and the trustee could work out the difference in such a way that he would not have to bear the cost of selling the car, and you would get to keep it... probably without paying the full difference. Depends on your estimate, your trustee, and your luck.

Good luck!!!