This forum has given me lots of info. already but I have a few questions that I hope somebody can help me with.
Background...We are a family of 6 in Michigan and looking to file chapter 7. At first we thought we could only file chapter 13 but we talked to a lawyer and he said chapter 7 no problem. I worry though because we are over the median income for our size family, and a previous visit to a different lawyer said we would have to go 13.
We have two older cars and the previous lawyer suggested we buy a car to help push us into the 7. We didn't want to do that because we are trying to get out of debt. Well as luck would have it (or not) I was in an accident that caused more damage to my vehicle than it was worth. We asked current lawyer about a new (used) car and he said no problem. I didn't think to ask until later if there is a limit on what we could buy and I worry if what we got will hurt us when we file. We bought a 2006 Suburban to replace the 95 Suburban that was wrecked. Price was 22,000 with a payment of $497. We need the bigger vehicle because we have 4 kids and need the 4X4 for my husband to get to work (90 miles away) no problem on snowy days. Trouble here? Also can we sell the wrecked truck? It will probably bring in about $1K if we part it out.
Also a quick question about a 401K loan we took out about 2 months ago, I know the 401K is exempt but what about the loan will we have to explain where that money went? It was only 2K and we used it to pay for some Xmas gifts and our daughter's senior pictures and some other things related to her graduating this year.
We want to file by Nov.1 but wonder if these things will hurt us.
Background...We are a family of 6 in Michigan and looking to file chapter 7. At first we thought we could only file chapter 13 but we talked to a lawyer and he said chapter 7 no problem. I worry though because we are over the median income for our size family, and a previous visit to a different lawyer said we would have to go 13.
We have two older cars and the previous lawyer suggested we buy a car to help push us into the 7. We didn't want to do that because we are trying to get out of debt. Well as luck would have it (or not) I was in an accident that caused more damage to my vehicle than it was worth. We asked current lawyer about a new (used) car and he said no problem. I didn't think to ask until later if there is a limit on what we could buy and I worry if what we got will hurt us when we file. We bought a 2006 Suburban to replace the 95 Suburban that was wrecked. Price was 22,000 with a payment of $497. We need the bigger vehicle because we have 4 kids and need the 4X4 for my husband to get to work (90 miles away) no problem on snowy days. Trouble here? Also can we sell the wrecked truck? It will probably bring in about $1K if we part it out.
Also a quick question about a 401K loan we took out about 2 months ago, I know the 401K is exempt but what about the loan will we have to explain where that money went? It was only 2K and we used it to pay for some Xmas gifts and our daughter's senior pictures and some other things related to her graduating this year.
We want to file by Nov.1 but wonder if these things will hurt us.
Closed November 2010
I know it has been done for BK cases and it should be standard across the board I'd imagine. Our lawyer asked us about the 910 rule and then the interest rate we had on our vehicle - since we didnt meet that requirement (910, i.e., cram down) - the interest rate was looked at. Ours fell within standards for a used vehicle (6-7%) so it didnt change.
Comment