Question Buying a new car before filing

[skpark701]

Here is my situation, me and my wife currently own 3 cars;

Car #1 has a loan of 12K and book value of 13K, this one I'll keep.

Car #2 has a clear title and worth $5000 trade in value.

Car #3 has a loan of $4000 and after payoff it worth $6000 in trade in value.

Now that leaves me $11k in down payment towards $30K car.

I'm planning to file chapter 7 within 6 months and after purchasing the car I'm sure the new car will worth more than $2500 that my state allowance to keep the car.
Do you think the court/creditor will take my car???

The reason for buying a new car is that car #2 & #3 is well over 100k miles and afraid that I won't be able to buy a car after BK.

Thank you,

[keepmine]

If your exemption is $2500 and you have $11K equity in a vechicle you can bet the trustee will snaggle it or, you'll have to pay to keep it.
You'll be better off financing as much as possible and spending down the remainder on either asets that are exempt or, just necessary living expenses.

[OhioFiler]

You're not going to have $11,000 equity in that car after you drive it off the lot. Look at current values of used cars of the same model and year you are planning to purchase. If they aren't readily available ask your salesman to give you the Black Book value for your car. I'm sure that value is available to him and it's a good indication of what your car will be worth when you put your name on the title.

I would sell your existing cars yourself thern make an appropriate downpayment that will keep you within the exemption amount. The balance of your proceeds from the sale of the cars could be used for normal living expenses or home fix up.

[HHM]

First, if you are are getting ready to file BK, buying a $30,000 car is probably not the best move.

As the others have said, you are better off (from a BK perspective) to put less than the exemption amount as a down payment. Also, I would rethink buying a "new car". If you are having financial troubles, you don't want another big liability that you won't be able to do anything about.

You haven't provided details about your situation, so what is in your best interests (i.e. the big picture) is unavailable). But, you are better off buying a used car (3+ years old) because if the BK doesn't ultimately solve all the financial problems, you can usually resell a used car for what you owe (which would not be able to do on a new car).

[OhioFiler]

First, if you are are getting ready to file BK, buying a $30,000 car is probably not the best move.

As the others have said, you are better off (from a BK perspective) to put less than the exemption amount as a down payment. Also, I would rethink buying a "new car". If you are having financial troubles, you don't want another big liability that you won't be able to do anything about.

You haven't provided details about your situation, so what is in your best interests (i.e. the big picture) is unavailable). But, you are better off buying a used car (3+ years old) because if the BK doesn't ultimately solve all the financial problems, you can usually resell a used car for what you owe (which would not be able to do on a new car).

But if he doesn't reaffirm the new car loan he can walk away at any time without penalty after discharge.