Advice on what to do with vehicle?

[StrawberrySu]

We have a 2006 Toyota Sienna (minivan) with 130,000 miles on it, and that's our "good car". By the time we file, we should only owe about $6000 on it. I just found out that state and district I will be filing in uses NADA clean retail value, which puts us at $14,000. If I subtract standard federal deduction that means we will have to use $10,550 of our wild card exemption to keep it. Yikes! I would rather have that as cash.

So the only problem with selling it now (maybe if lucky we can get $10k out 0f it) is we feel we will need the payment in our monthly expenses for schedule J. However, our payment is only $235 a month, and I am thinking I could find some other expenses to make up for that. Would have no problem getting a loan on a less expensive van (need it to haul my four granddaughters around when they visit), but that is not in the cards since we are four months into default on ccs and mortgages.

We had planned on selling it after bk, to get rid of the payment anyhow. The loan is with Capitol One Auto, and I hate being in bed with them anyhow. If we sell it now, and their are any problems, that can then get worked out through the bk.

Any thoughts or advice on the best way to proceed?

[daylate]

Su-I don't get how they can arbitrarily pick a category to use,although I guess they can. If you want to keep it, take it to CarMax and have them give you a written offer for it. I have to believe that an arm's length transaction would trump their standard. A van with 130000 miles is not going to be worth 14000 imho.

let's see what others have to say.

[StrawberrySu]

Su-I don't get how they can arbitrarily pick a category to use,although I guess they can. If you want to keep it, take it to CarMax and have them give you a written offer for it. I have to believe that an arm's length transaction would trump their standard. A van with 130000 miles is not going to be worth 14000 imho.

let's see what others have to say.

Daylate, I agree it shouldn't be worth that much, but I think the problem is values on used cars are skyrocketing because people either can't afford, can't get financed, or are just choosing to wait until the economy gets better to buy new cars. Or, as my hub just suggested, everyone is hoping an affordable energy efficient car is coming down the pike, and are waiting on that to happen.

Let me take this chance to correct my math. I am not an idiot, but I am feeling sub-par today and forgot to deduct the $6000 I would owe on the car from the total I have to exempt. So in actuality it is $4550 I need to use from my wild card. Hub's car is a 2005 Toyota, 182k miles, is paid for, and the NADA is $8700, so that leaves $5250 to exempt on wild card, for a total of $9800.

[dman]

You could just take your chances. See what you could REASONABLY sell that van for. Then, protect at least that much with exemptions. So if you check around and see you could reasonably get $10,000 for it, and you owe $6,000, then just exempt $4,000. IF the trustee takes it and sells it, he/she HAS to pay off both the $6,000 loan AND pay you the $4,000 you exempted. They may make you an offer to buy-back, just say no...tell the trustee he/she can sell it for you. I think this may be a viable option for you, since you're planning on selling it anyway.

[StrawberrySu]

You could just take your chances. See what you could REASONABLY sell that van for. Then, protect at least that much with exemptions. So if you check around and see you could reasonably get $10,000 for it, and you owe $6,000, then just exempt $4,000. IF the trustee takes it and sells it, he/she HAS to pay off both the $6,000 loan AND pay you the $4,000 you exempted. They may make you an offer to buy-back, just say no...tell the trustee he/she can sell it for you. I think this may be a viable option for you, since you're planning on selling it anyway.

There's an idea, dman! I am sure I have read that before, but it just slipped my mind as an option! I have seen similar vehicles on Auto trader for $9500 to $16000, locally. I guess it's a super popular used van, we have even had dealers want us to trade it in (usually they act like they are doing you such a big favor).