used car purchase question

[Geo]

[IBroke]

Hi Geo,

The problem is that you can't charge a higher amount to your CC shortly before filing. That debt wouldn't be dischargeable. If you put a higher amount on the CC and want to have that discharged, you will have to wait for 180 days before you can file.

[Geo]

If I were to buy a used car it would be for less than $3000 to stay under the exemption limit. And I would plan the purchase far enough out so that it would be at least 180 days from when I would file bk.

[IBroke]

If I were to buy a used car it would be for less than $3000 to stay under the exemption limit. And I would plan the purchase far enough out so that it would be at least 180 days from when I would file bk.

In that case, it should work. If there is a lien on a car, in 90% of the cases, you are underwater on the car so it's not an asset and won't be taken if you keep on making payments. If it's paid by cash or CC (that actually doesn't matter in that regards - as long as it's paid off), it counts towards your limit. If it exceeds the limit, it can be taken. That's probably what you were talking about in the initial post.

Let's see what the other experts have to say.

[keepmine]

Let's back up.
Why are you considering filing bk over $3K in cc debt? The student loans will likely survive discharge.

[Geo]

I do realize I'm stuck with the student loan, but my ex is taking over that loan anyway. I guess I'm feeling a bit pessimistic about finding another job where I make enough to pay my bills, so I'm just planning ahead for a worse case scenario. I'm hoping that I can just do a foreclosure without filing bk. But if I have any unexpected major expenses, such as repairing or replacing my car, then I'm in trouble and bk becomes more likely, or if things get bad and I need to use my cc for basics like food. I've been paying off my cc and haven't used them at all for a couple of years, so I'd hate to have to go the bk route, but if things get bad it is an option. So, I'm debating whether to pay cash for the car repairs or to put it on a cc, since I'm trying to save as much cash as I can. I don't own many assets so i don't have much to lose if I had to file bk. The only issue is that I'd hate to lose the savings bonds I have set aside for my son's college fund, so I'm trying to figure out a way to not lose that. To be honest, I hate my house and would love to get out of it, but with the housing market so bad I don't have much faith that it would sell, plus it needs some work done before it would be ready to sell, and I'm not going to spend the money I have set aside for that now that I'm losing my job soon.

[keepmine]

Nothing wrong with some preplanning.
First thing though is not to panic and start gathering some facts.
Are you in a recourse state? Meaning can your lender sue you for a deficiency balance on a mortgage loan? If so, how large a deficency balance would you have?
I'd not spend my cash stash on home repairs either if, you're underwater by a signficant amount.
Just try and calm down. Nothing bad is gonna happen for awhile.

[Geo]

I've been reading this forum for a couple of months and have learned a lot, especially the need to pre-plan. I'm in Missouri, which is listed as non-deficiency, so I'm okay as far as that goes. According to Zillow my house is worth $23,000 more than I owe, but I can't believe that isn't accurate. Besides, the carpets need to be replaced, as well as a few cosmetic touch-ups and repairs. I need to get a real estate agent to give me a market appraisal so I have a better idea of what the house is worth in it's current condition. I'm trying to stay calm and focused, but this is all pretty scary, and my main concern is taking care of my son and making sure he has a roof over his head. I just never thought I'd be in this position.

[tcreegan]

on track

Hi Geo,

You seem to be right on track: getting the house ready for sale, the ex taking over the student loans, preplanning for a BK,

what about unemployment benefits?

Selling the house is a must, foreclosure or BK will thrash your credit for years.
Planning for income so you don't need the cc's is a must. BK is not a solution for living off cc's, you lose them in the BK and still have the living expenses.

So, start planning for more income or benefits. Is there a local agency to help people w/ benefits? Affordable housing, based on income, food bank for food, income based medical clinic? There is usually more help out there than people realize...but there is also a lot of paperwork and some waiting so starting the ball rolling ahead of time is a good idea.

Glad to see you being proactive, best of luck to you and your son !!

Tom in Colo