Car totaled days before planned filing

[rhp]

I was planning to file CH 7 on this coming Tuesday. Friday morning I was involved in a roll-over wreck and my car was totaled.

I will speak with an attorney for sure, but would like some opinions on how to best handle it.

One of my concerns is how to manage the payout. I own the car. If they give me blue-book, it would be about $8-9k. The total exemption in AZ is $5k. Would it be best to buy a $5k car and pay some rent and other bills with the difference? What if I buy a car for over $5k with someone else on title at this point? My gf could contribute, making us both owners of the new car.

Any advise or insight is greatly appreciated. Just when I thought I had it all figured out!

[nokia123]

I would like to see the answer on this one, I have a friend who is filing pro se and the same thing happened to her.

[rhp]

Oops. "Advice," not "advise." Another typo immortalized on the internet.

[keepmine]

I'd just buy a $5K car and spend the rest on normal HH bills, any needed medical, dental work. New glasses/contacts etc.
Don't involve others in your bankruptcy.

[johncock]

I asked a very similar question yesterday. It's on page 2 now.

[JackBondLove]

Well, the bigger issue is that it will take some time before your insurance company forks over the award. To take advantage of the car exemption, you would need to wait until that happens and then buy the replacement car before filing. You should walk into every dealership you see and say that you need to buy a car at exactly $5K (official sales price before tax/title, etc.), and to have them show you what they can sell you. You could even take a small loan to cover any extra in the price, and just reaffirm it. Than take the remaining $3-4K and spend on anything you can think of that would be considered a necessary expense, like going to the dentist, optometrist, physician,buying a new pair of shoes, household items (if they would be exempt), food, etc. You want to have ZERO cash on hand when you officially file

[rhp]

I don't think I'd qualify for a loan at this point. Unless it was a loan from my parents. But would that make things sticky, too, as far as the trustee is concerned?

How tight are trustee's on valuing a car? If it's a car worth $5,500, will they make me buy back $500 worth, or let it slide?

And is the purchase price important, or if it it's all about the kbb value? I have a friend who will help be buy a car at auction, which could save me a few bucks. But, what if I buy a car at auction for $5k and the kbb is $6k? Seems unreasonable to think they'd be able to sell it for more than the auction price I just bought it at, but who knows how they think.

[rhp]

I asked a very similar question yesterday. It's on page 2 now.

I saw that. Did you decide what you're going to do?

[johncock]

I presume I can use my exemption at $3,450 and my wifes at $3,450 and be safe at $6,900. We also get a wildcard exemption of $ 1,150. So then, I feel safe spending $8,050.

On a side note, it seems odd that they would take a modestly priced vehicle, that is the only means of transportation, from a family. Even if it slightly exceeded the exemption amount. ?

[tcreegan]

Hi all,

rhp, AZ only exempts $150 in a bank account so it pays to heed JBLs warning about emptying your accounts. Oddly, I did not see any mention of cash on hand in the ARS

http://www.azb.uscourts.gov/documents/arizona_exemptions.pdf

Unless it was a loan from my parents. But would that make things sticky, too, as far as the trustee is concerned? .....yeah, insider transactions are sticky. Document the heck out of it if you do.

How tight are trustee's on valuing a car? ....appears to be luck of the draw, some tight, some loose, kinda like the 1-armed bandits in Vegas

If it's a car worth $5,500, will they make me buy back $500 worth, or let it slide? ....not as much letting it slide as the cost of sale. The trustee has to pay for towing, storage, auctioneer, and then there is an uncertain sale price and the hassle factor. This amount will vary by trustee, but I'll bet each one has some sort of "only if more than" number.

And is the purchase price important, or if it it's all about the kbb value? ...what if I buy a car at auction for $5k and the kbb is $6k? ....find out how the trustee sells cars. If they use the same auction house, doubt they would quibble over a recent auction sale price. If they send it off to CarMax, find out how CarMax values cars. If they use a local used car guy, find out..well you get the idea.

but who knows how they think. ...this is the key to the whole situation. Here is where an attorney w/ experience working w/ the local trustees earns their pay.

Tom in Colo

ps: On a side note, it seems odd that they would take a modestly priced vehicle, that is the only means of transportation, from a family. Even if it slightly exceeded the exemption amount. ? ....remember they only sell for the non-exempt equity. And remember that the trustees job is to maximize the return to creditors, it is your attorneys job to minimize that amount.

[rhp]

Thanks, Tom. Yep, back to the lawyers.

I'm also worried about depositing an insurance check, since I have a pending judgment with a card company.

[daylate]

I presume I can use my exemption at $3,450 and my wifes at $3,450 and be safe at $6,900. We also get a wildcard exemption of $ 1,150. So then, I feel safe spending $8,050.

On a side note, it seems odd that they would take a modestly priced vehicle, that is the only means of transportation, from a family. Even if it slightly exceeded the exemption amount. ?

Just make sure you have the car titled in both names to be sure you can use both exemptions