Can I pay off my car before filing?

[crescentmoon]

Well, at this point, we have stopped paying our credit cards, but are still paying the car loan and the mortgage (we are on time for both - never late, never missed a payment). With not paying the credit cards, we actually have the money to pay off the car within the next month or so.

Can we do this? Will we cause major problems for ourselves when we plan to file middle to late August?

We are planning to keep the car, and realize that if we own it outright, there will be fewer issues with reaffirmation. We just want to make sure we're not shooting ourselves in the foot before filing.

Any insights?

Thanks!
KBB

[Chowder]

It would depend on the non-exempted value of the car.

If it's significant, you could lose it.

[AlreadyFiled]

I would not recommend paying off your car before you file... neither did my lawyer

[pcn]

2nd what chowder said. we are trying to add a lien to one of ours for just that reason. If it's paid off it's an asset. Make sure you can protect it it is becomes an asset. You'd hate to pay it off just to have the trustee take it away, sell it , and give the money to your creditors.

[crescentmoon]

Thank you guys!

When I thought about it, I realized that if I pay it off, I end up with all of it as "equity", whereas while its part of a loan, I only have $1000 equity or so!

Excellent!

KBB