Closing the means test gap

[sebaco]

Friend met with lawyer who said she was $480 away from qualifying for Chapter 7 after running her income and expenses, but suggested that she buy a car, any car, and get it registered and titled in her name. She would then "over" be $20 something dollars.

As she (my girlfriend) doesn't currently drive as she is close to work, this was certainly a curve ball. However, with $75k in debt buying a $500-$1000 junker and then getting things discharged seems like a bargain.

Would appreciate any general impressions on this strategy. Btw, the advice comes from an expensive $2,000 fee attorney who has been doing this for 18 years...(in Texas by the way).

[Guest]

The reason the attorney is suggesting that she buy a car is because it will give her the ability to claim the IRS deduction for auto expenses. Since that deduction is $487/month in Texas, having a car will make a huge difference on the means test.

[sebaco]

RIght...we just wonder how far we actually have to go. I.e. just get it titled in her name.

Also, what's the risk the trustee sniffs this out?

[Maine]

To claim expenses for a car she would need to get the car, register it, insure it and yes- have it in her name.

They can and will check dmv records to look for assets- some people try to hide having a NICE car, and other people say they have one when they do not.