Problem?

[NeedNewStart]

Ok...
I've kinda asked this before and I did discuss it with my lawyer but I wanted to get some opinions here again before I do anything.


I want to file ch. 7 around the middle for June and just got a pretty large tax return. My car is old and will not last much longer. I will be using Nevada exemptions which allow for $15000 in equity in a motor vehicle. I want to use my tax return and trade-in my old car for a new one before I file. I want to buy a car that will last 10+ years. I'm planning on starting a family once this whole mess is over and want to make sure I get a car that will fit all of our stuff.

So what I want to do is buy a Toyota Highlander or Rav4. I'll have about $12000 down but I'll need to finance about $10000. My credit is still okay right now so I think I'll be able to get a decent loan.

So I'd be purchasing the car and taking out the loan within the next few weeks and then filing BK mid June.

I just want to know if anyone thinks the trustee will have a problem with this. I don't want to raise any eyebrows....

Thanks

[SuzieBK]

We bought a new car in early February and will be filing sometime in the next few months. I met with our attorney yesterday and he said that wasn't a problem at all (in our case, we didn't put anything down, so the whole thing is financed) because they only look at the equity in your vehicle. Now, I suppose if you had a Maserati, some eyebrows might be raised, but I can't see a Toyota being a problem.

BTW, we bought the Mazda5 and LOVE it. It's smaller than the Highlander or Rav4, but still has a small third row for toting the kids around.

[NeedNewStart]

Thanks Suzie.

[justbroke]

I would only say yes, because of the generous motor vehicle equity exemption in your State. What I wouldn't do, is buy a current model year car (2009) because you'll lose that equity after driving off the lot.

In any event, I may go for a 2008 that hasn't sold yet. Make sure you get the deepest discount. Shop around. Look at Edmunds.COM. Compare what you should be paying for it. Make sure you get an excellent finance rate (with 50% down).

[NeedNewStart]

I totally agree. No need for a brand new car unless they're going to give me some kind of insane deal. I'll be looking at 2007 and 2008's.

Honestly I would rather save the money from my tax return but my state doesn't allow you to keep any $$. I'll need a car in the near future anyway so I figure it's a good way to use the money instead of just giving it to the trustee.

[Duke89]

I doubt you'll have any problems. I bought a new Accord in July and filed in October and it did not raise any eyebrows. No one ever asked a question about it. The expense on the new car even helped with the means test as the car that I traded in (an older Accord) was fully paid off at the time.

[NeedNewStart]

Thanks for the info. I just seems weird that you can buy a car but can't keep money in the bank as an emergency fund. Oh well.... nothing seems to make sense anymore anyway. I just went and test drove a 2008 Highlander. I loved it!!! I've been driving the same car since I was in high school... so it's well deserved.