What to do with my tax return

[wildebeast]

We won't be filing our Chapter 7 until at least April, but I will be getting our tax return next week. We are getting $10,000 back.

I will be using some of it for the lawyer fees when it comes time, but I need help with the rest.

I have a $300/month car payment on the van we are keeping. I owe about 1 1/2 years or $5500 left. Our 2nd car has 200,000 miles on it and is 14 years old. It will need to be replaced in the next year or so.

Should I use the $ to buy a replacement car now? Or should I pay off the van and eliminate a monthly payment.

Our credit is shot, since we stopped paying our bills. I think it will be hard finding a good car that we can even afford. I need to keep $2,000 for the lawyer, and keep enough cash to pay for licensing and registration of the car, which is a lot in this state.

If I pay off the van, I can use the rest for car repairs and a few home repairs as well. SUggestions???? Please help!

[wildebeast]

Anyone??

[AngelinaCat]

If you pay off the van now, you eliminate a mortgage note on it that may keep it safe should you be ruled an 'asset case' and the trustee go looking for assets to sell off.

You probably ought to look at replacing the second vehicle, but make it nothing fancy. Storable goods, food, soaps, supplies, things like that are good. So are repairs that will need to be done anyway.

Doctors visits, dental work, eyeglasses..... Also have an emergency cash fund--for TRUE emergencies. Set that amount aside and forget about it. 'Hub and I carry and emergency $100.00 bill in our wallets. This is for true emergencies, such as when we got stuck in 'sugar sand' in the Ocala National Forest. The tow truck driver that showed up to pull us out, would only take cash--no checks, and certainly no plastic.

Not knowing what state you are in makes any more specific answer difficult.

[Flamingo]

$10,000 is a heck of a lot of money to receive before filing and filing just a few months after. Say $8,000 after attorney's fees. Anything you purchase is going to be looked at so before you do anything with that amount of money I would consult first with your attorney.

[Trixie007]

We're very similar - about 9k Federal - and our attorney just asked me if we would be willing to hold off on filing (were planning to file in April) to allow more time between the refund and filing, plus we're keeping all receipts.