I live in Florida and about to file chapter 7. Currently I still owe 2500.00 on my truck (07 toyota tundra) and Kelly Blue Book retail value is 19k or private party value of 16k. Truck needs tires ( 1000.00) and has 120k miles. I am single and have no real assets and don't own a home. Can I sell the vehicle and take the equity to say pay down my 2013 taxes I owe (5k) and use the rest for a down payment on a newer used truck? I really need a reliable truck as l am a contractor by trade and would prefer to keep and pay off my current truck. Any advice out there.
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Assuming the Nolo site is up-to-date on Florida exemptions, you have a $1,000 vehicle exemption. There is also a $1,000 personal property exemption and a $4,000 wildcard exemption that you may be able to use if Florida allows "stacking". But, I assume you will need some of those exemptions for your personal property. Nolo doesn't list a tools of trade exemption, but it may not list all exemptions. Consult with a lawyer to determine the maximum amount of vehicle equity you can exempt.
It shouldn't be a problem to sell your truck and use the equity to pay non-dischargeable taxes and as a down payment on another truck. Just make sure that you don't end up with too much equity in the new truck. If after paying your taxes the proceeds are too high to exempt, there are other things you can do to spend that money before filing. Whatever you do, don't pay any dischargeable debt if you know you are going to file BK.
It is always a good idea to consult a BK attorney before selling assets and paying debts on the eve of bankruptcy.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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