My car value = $7.5k Virginia exemption $2k

[Pandora]

we have 3 vehicles - owned outright

we got the alloted 2K exemption, and our plan is based on the amounts of equity in those vehicles. If you want to keep the vehicle - you have to pay it back in the plan or have the trustee liquidate it to pay back your creditors (if in a Ch. 13). In a Ch. 7, its going to be the same way; you either have to relinquish it to the trustee to sell or..you buy it back from him/her (if you own it outright). If the trustee sells your vehicle, they'll give you the exemption amount - but will distribute the rest to creditors that they get from the sale.

[Skinsfan]

we have 3 vehicles - owned outright

we got the alloted 2K exemption, and our plan is based on the amounts of equity in those vehicles. If you want to keep the vehicle - you have to pay it back in the plan or have the trustee liquidate it to pay back your creditors (if in a Ch. 13). In a Ch. 7, its going to be the same way; you either have to relinquish it to the trustee to sell or..you buy it back from him/her (if you own it outright).

That's what I thought and why I want to explore different options. If the exemption is $2,000 and the trustee values my vehicle at $8,500, then I'm throwing away $6,500, or so I feel.

If I use my vehicle as a trade-in for a newer car, say $20,000. With taxes and fees it'll be $22,000. If I should be so lucky as to have the dealer give me say $6,500 for my car, I would have a loan of $22,000-$6,500, or $15,500. If the car is retail at $20,000, maybe the NADA would be only $17,500.

That would give me $17,500-$15,500 = $2,000k equity, but then I have a decent ride with only a $15,500 loan.

[Pandora]

why dont you pick the type of car you want online (do a fantasy type of thing) and play devils advocate? Remember too that any difference in loan to value cannot be crammed down -and a new car will lose immediate value as soon as you drive it off the lot, essentially making up upside down immediately.

you should research online before you buy as well - and never pay more than 1% over invoice for any new vehicle. you could also look into purchasing a 1 year old model or a rental vehicle - the huge depreciation is already gone at that point in time and most are still under manufacturer's warranty with the option of still purchasing an extended warranty ;)

Good luck to you!

[Sideways]

Vehicle Exemptions:

One item that is often over-looked is that exemptions are periodically changed in your state legislature sessions. For instance, in last years session here in Idaho the normal $5,000 vehicle exemption was changed in a new bill to go into effect on July 1, to $7,000 (double for married couple.) One can also use the $800 wild card exception (double again if married) for the primary vehicle or it can split in the case of owning two vehicles. All totaled it amounts to about $15,600 if married..quite liberal compared to some states. Another item to nail down is just what source they use in determining the value of your vehicles. In order to get information on this generic stuff in our district court I use our legal aid system, since, I just turned 60 and qualify. However, even though they are attorneys they are limited in scope because they are not working day by day in a court room setting. Nevertheless, our courts use Kelly Blue Book in determining value but they use the "private sale" valuation that is a lot better than retail value. As far as any back room stuff goes on trying to keep your equity in a vehicle I do not really have any ideas..other than I have wondered what they would do in a BK or judgement case if you took out a title loan on your vehicle. If it was your last asset and you needed money desperately to survive I do not know if they could object to it as an illegal transfer? Then you might also have the added benefit of the vehicle no longer being in your name. Just a thought but do not know if it would fly?

[KevFinnerty]

I'm new to all this and confused....

Fed exemptions say $3325 allowed for vehicle.

NADA lists mine as $3575 for rough tradein, 4425 for averagetradein, 5125 for clean trade, and 7225 for clean retail.

KBB lists $4,740 Fair Private Party Value, $5,440 Good Private Party Value,
$5,865 Excellent Private Party Value.

Edmunds is all over the map, not a "valuing site" but a place like Craigslist where people are selling their cars similar to mine with varying mileages, condition, upgrades, hot rod mods, mileages, etc, from like hundreds of $$ to $20,000 or whatever.

My car is not acceptable by retail standards, it would require some bodywork/paint/inside maintenance, stuff like that.

It is 10 years old and in the past year or so I (perhaps wasted) $5000 in repairs in it (long story - brakes, transmission, clutch, timing chain, water pump, O2 sensor, evaporator vent solenoid, belts, inspection, mid exhaust, air filter, oil chgs, spark plugs, plug wires, list goes on and on). So runningwise it is (supposedly) solid now but body wise it has some problems including being hit while parked a few weeks ago, probably about $1000-2000 worth of damage (which I cannot afford to fix because of my $500 deductible) - nice of the jerk that hit me to have left a note (NOT!) btw.

How would I factor all this in to give a value? And yes, after putting all that into it for repairs I don't want to lose it, and I am attached to it (perhaps not a good thing, maybe I should let it go but - then how the hell I am going to get around to even get something else????).

The way it looks from the collision I doubt it would even sell for $2000. But if they were to take it to sell it how would I even by it back?

How does that work (and note that the only way I could buy it back would be from exemption $$ from my homestead since I am broke now)?

Or if it were valued more than $3225 could I use some of my homestead exemption to cover it so they don't take it in the first place??

[Sideways]

Vehicle Exemptions:

I am just a lay person here and new to this forum. However, the reason I posted about always checking the current federal and state exemptions for your property is because there is so much old, out of date information floating around on the internet. I have never really looked into the federal exemptions because out state only recognizes its own state exemptions. Therefore, I really cannot help you with all your questions about valuing your vehicle according to federal guidelines. However, it would might be worth a call to whomever is in charge of the trustees at your local federal courthouse. Since, the trustees are the ones that are going to decide if you have any equity in your vehicle, then it would be reasonable to think that they must have some valuation standard that they go by. Our state uses Kelly Blue Book (Private Sale) as their guide. Subsequently, no matter how they determine the value of your vehicle you will be non-exempt and liable one way or another for any amount over what they will allow for your vehicles exemption. I am not sure how the federal exemptions work, but perhaps you can use other exemptions like the wild card (if they have it) to go over the amount that they would normally use for the valuation and keep the car. I do not know about using part of your homestead exemption..i guess it would depend on federal code?

[feelingnutsy]

Hey---Pandora---I'm in Virginia too---and I'm getting a rough trade-in price
of $2,375 on NADA---and a KBB trade-in value---fair condition of $3,350.
This puts me over the $2,000---and can wildcard cover the difference in Va.?

[Pandora]

Hey---Pandora---I'm in Virginia too---and I'm getting a rough trade-in price
of $2,375 on NADA---and a KBB trade-in value---fair condition of $3,350.
This puts me over the $2,000---and can wildcard cover the difference in Va.?

I believe you have to average the trade-in value and personal sale value to come up with the value the trustee uses (or at least our Trustee did that) because retail is too high and trade in is too low - so he went somewhere inbetween trade-in and personal sale. However, its up to your trustee on how he/she decides to figure it. We're in the Western District. I believe if you have the wildcard still available to you, yes, you can use it for whatever you need it for after all your other exemptions are taken care of.

[feelingnutsy]

Thanks for the info---Pandora---and I went to KBB first---put in the relevant
info and got the low end and the high end---and then averaged them---and
then I double-checked myself on the NADA site---which came up close to the
average amount at KBB---and then I triple-checked at Edmunds---didn't know
about this site---and it showed my car/model/year---and it was in the same.

[757Atty]

Too Much Car

I'm new to all this and confused....


Or if it were valued more than $3225 could I use some of my homestead exemption to cover it so they don't take it in the first place??

Yes, you can layer exemptions (or at least I know you can for VA, NC, and federal) and so if you have some of your leftover wildcard "homestead" exemption, you can add that to your car's coverage.

So VA, which only gives you $2,000 towards a car, would let you cover, say, $3500 of car value with using up $1500 of your homestead also.

So schedule C would have one line for 34-26(8) and another line for 34-4.

Another strategy is to take an unfair NADA value and then deduct from that the cost of major repairs, the sort of thing the dealership would have to be able to fix to sell the car for that in the first place, and definitely anything needed to pass inspection. If you do this, spell it all out in your Schedule B property section. Use the description space to say something like:
2002 Honda Civic (needs transmission work)
Value = NADA minus $1200 estimated repairs.

Then simply list a lower value in the column, since you have disclosed exactly how you arrived at it.