Crunching numbers - does this make sense?

[EmmaPeel007]

Right now I'm looking at Chapter 13. I'll meet with my attorney on Wednesday to go over details.

We have 2 cars - a 1997 Nissan Pick-up and a 1999 Honda CR-V. From what I've read, it has been suggested that if you have older vehicles it's a good idea to get newer cars before your 13 is filed.

So I crunched numbers and if we get 2 new cars - not luxury, more like a Honda Fit and another CR-V - to replace our older cars I'd qualify for a Chapter 7.

Does this make sense? And will it set off alarm bells?

[justbroke]

Makes sense! Acquiring new debt 90 days before filing will certainly set off bells, as you're technically Bankrupt 90-days before filing!

Look... your cars are almost 10 and 11 years old. You must replace them anyhow! If that causes you to qualify for Chapter 7, sobeit.

The only objection that I could see come is if it was done within 90 days... as the value of your old cars may be the property of the Estate and voidable. But, that depends on the State you live and the exemptions you have for vehicles. (For example, Florida has a $1K exemption on vehicles. Other States are more lenient Federal allows $3.2K per vehicle -- with a debtor spouse filing together.)

This is the perfect question/scenario to ask your lawyer! We'd be very grateful to know the lawyers response and reasoning! I don't think, that a lawyer can "advise" you to do it, but you can ask the lawyer the what if!

I'm no lawyer, but I figure worse is that you have to pay the value, less the exemptions, to the Estate in a Chapter 7.

EDITED TO ADD: From the Bankruptcy Law Network, I just learned that the 8th Circuit Court of Appeals struck down the language making Bankruptcy Lawyers "Debt Relief Agencies" and thereby disallowing them to suggest inquiring new debt, as unconstitutional!!!