Hi everyone,
I filed Chapter 7 last week, and the only issue I still need to work out is my car.
I am married, but filing myself. My husband is not involved in the bankruptcy.
I am in FL, where there is only a $1,000 car exemption. My 19 year old college-age son uses an old, beat-up car to travel to college with, and that car is in my name only. It is an old '99 Toyota Rav 4 and is probably on its last legs. It has around a $1,000 value (according to what my attorney looked up), so the state exemption is going towards that car. Taking this car from my son and using it myself is just not an option.
That leaves me with my car, which I own free and clear. I have a 2008 Honda Element EX that my attorney came up with a value of about $9,000 for. I don't feel it's an option to give up the car, as I then have no transportation to get to work and no money to buy a car. I feel really stuck.
My attorney and I talked through a few options. One of them is seeing if I qualify for a 722 Redemption loan, to basically buy back my car over a few years. I am not sure if I'll qualify since my income fluctuates so much month to month, but I did make an initial call to a 722 Redemption company and received an application.
Another option is taking $9,000 from my IRA or 401K. I can't do a loan, since I am no longer employed at the business where I have my 401K. I recognize the tax hit and early withdrawal penalties, and I would have to take out more than $9,000 to cover the taxes. Currently I have about $80,000 in 401K and IRA. (My husband has about $45,000 in his).
Apparently you can also buy-back from the trustee, but my attorney says we get 10 months for that, and $900/month is too much, so that does not seem like an option for me.
The other option was a Chapter 13, which I already rejected. The Chapter 7 is filed, and my income was very much below the means test level. It wasn't even close.
This car issue is stressing me out and I need an objective voice or two. My gut instinct is to go with the 401K withdrawal, because even if I qualify for the 722 Redemption, I really was looking for a fresh start, and having a loan to pay off right after discharge is not appealing at all.
Side note, I plan to keep my home (also in my name only -- I owned the house before I got married 4 years ago and husband moved in), so I will continue to pay my mortgage each month, but besides a mortgage, I was really hoping not to owe anyone anything and start rebuilding my financial life.
Thoughts? Ideas? What would you do in my situation?
I filed Chapter 7 last week, and the only issue I still need to work out is my car.
I am married, but filing myself. My husband is not involved in the bankruptcy.
I am in FL, where there is only a $1,000 car exemption. My 19 year old college-age son uses an old, beat-up car to travel to college with, and that car is in my name only. It is an old '99 Toyota Rav 4 and is probably on its last legs. It has around a $1,000 value (according to what my attorney looked up), so the state exemption is going towards that car. Taking this car from my son and using it myself is just not an option.
That leaves me with my car, which I own free and clear. I have a 2008 Honda Element EX that my attorney came up with a value of about $9,000 for. I don't feel it's an option to give up the car, as I then have no transportation to get to work and no money to buy a car. I feel really stuck.
My attorney and I talked through a few options. One of them is seeing if I qualify for a 722 Redemption loan, to basically buy back my car over a few years. I am not sure if I'll qualify since my income fluctuates so much month to month, but I did make an initial call to a 722 Redemption company and received an application.
Another option is taking $9,000 from my IRA or 401K. I can't do a loan, since I am no longer employed at the business where I have my 401K. I recognize the tax hit and early withdrawal penalties, and I would have to take out more than $9,000 to cover the taxes. Currently I have about $80,000 in 401K and IRA. (My husband has about $45,000 in his).
Apparently you can also buy-back from the trustee, but my attorney says we get 10 months for that, and $900/month is too much, so that does not seem like an option for me.
The other option was a Chapter 13, which I already rejected. The Chapter 7 is filed, and my income was very much below the means test level. It wasn't even close.
This car issue is stressing me out and I need an objective voice or two. My gut instinct is to go with the 401K withdrawal, because even if I qualify for the 722 Redemption, I really was looking for a fresh start, and having a loan to pay off right after discharge is not appealing at all.
Side note, I plan to keep my home (also in my name only -- I owned the house before I got married 4 years ago and husband moved in), so I will continue to pay my mortgage each month, but besides a mortgage, I was really hoping not to owe anyone anything and start rebuilding my financial life.
Thoughts? Ideas? What would you do in my situation?
Bankruptcy Wizard
The 722 Redemption is applied for, and I'm just waiting to hear at this point. Fingers crossed I am approved. If not, I will have to go back to the drawing board. My job requires me to do some car travel 2-3 times per week, very often 1+ hours away in the evenings (self-employed job). Taking my son's car is not an option, as mechanically it is very unreliable and I cannot be caught 90 miles away from home at 11pm on the side of the road. Already, you can hear it clanking down the road, LOL. Florida's measly $1000 car exemption is killing me here!
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