question on giving back car in a 7

[dork]

Hi,

I'm planning on giving back my car (Owe another 3 yrs, 10k while its only worth 4k). I would be buying a used car with cash. How would i time this? Does it go back after i file or after discharge? And when would i be allowed to buy the used car (cant go a single day without a car).
And if i am giving it back, does that mean the payment doesnt count towards the means test?

Thanks!

[btbeme]

The repossession would happen only after the stay was lifted, and that happens only when you are discharged or the car company is granted a lift of stay upon their request. If you do not pay for a while before you file, you might get a repo sooner than you want though.

You can buy with cash before you file if you want, then stop paying and return the other car before filing. The timing is then under your control. However, you do lose some benefit of having the car payment counted under your means test, which may or may not make a difference to you. Check this carefully so you do not get tossed into a Ch 13. Also make sure you can exempt your new purchase. It might be worthwhile to make a down payment and finance the rest of the car until after your discharge (making sure you reaffirm the loan). Also, if you make a purchase immediately before filing, make sure the lien (if there is one) is perfected before you file or your car will go straight to the Trustee.

Otherwise, wait until after discharge. Stop payments after your 341 and expect a repo immediately after discharge (like the day after). Have your new car ready to purchase. But, the cash you would use to buy it would factor in to your filing as well, unless you are able to exempt that cash.

Do a little homework on each scenario and see which one works best for you.

[AngelinaCatHub]

btbeme has a good plan. One filed you will have the car a while as they do have to lift the stay. But you can stop the payment just before you file (that month) and the test would still be valid when paperwork submitted. If you buy equal to or below the State's exemption you are fine. Buy before you file as you need permission to go into debt or put out a bunch of money. Don't do anything that would present itself as a planned event to keep assets from the estate. How is your credit now? What kind of used car do you have in mind? Consider the new used car payment to become lower than your existing payment and of course shorter. Purchasing from an individual is always a better deal. (in most cases).

Mrs. and I drove an 800 dollar beater for four years. It was a cherry car but looked like what it was. Keep and eye on the weekend for the car for sale signs and just make a call. Let us all know how you did. 'Hub

[dork]

Thanks for the advice, sorry i havent answered quicker. The new used car would be below the exemption, paying cash once i have enough. My credit is rotten, average score low 500's...would rather not finance for awhile. Found one in the area for about 2500, probably wont file till later this year (just stopped paying cc's this month).

[btbeme]

Thanks for the advice, sorry i havent answered quicker. The new used car would be below the exemption, paying cash once i have enough. My credit is rotten, average score low 500's...would rather not finance for awhile. Found one in the area for about 2500, probably wont file till later this year (just stopped paying cc's this month).

Paying cash and doing the car swap first while delaying BK is a good choice, so long as the car is below the exempt amount and your filing does not need a car payment in order to limbo under the Means Test (most people are safe here). Make sure the title is clear and in your name before you file - you should get an updated title from the state once you license the vehicle. You will need that as well as proof of insurance in order to file BK (the Trustee will want it).