Purchasing a new car before filing

[Ann]

If someone here believes they can help me out with this one please do. I have read that is sometimes best to buy a new car before filing so you have no equity in your car. I have thought much about this one and here goes... If we have 2 cars that only have less than a year left on each of them should we go and trade these in or at least one of them in before we file??? If so, our credit is in the toilet now so who would finance us. Any recommendations here? I hear Ford credit is a good one. There is a possibility that we may not be able to file 7 and if that is the case than we will need a car before that 5 year mark is up. Please reply!

[lrprn]

Ann, whether you should replace one of your cars before filing depends on a lot of things.....(1) your state's vehicle exemption and whether it and any other exemptions can protect all the equity you have in both cars, (2) the current condition of the cars, (3) your current credit worthiness, and most importantly, (4) whether being pushed into a 13 is a real possibility or just a fear.

Sit down with your lawyer and discuss your situation thoroughly. Ask what he/she would do about cars if in your shoes.

[Ann]

[QUOTE=lrprn;311751]Ann, whether you should replace one of your cars before filing depends on a lot of things.....(1) your state's vehicle exemption and whether it and any other exemptions can protect all the equity you have in both cars, (2) the current condition of the cars, (3) your current credit worthiness, and most importantly, (4) whether being pushed into a 13 is a real possibility or just a fear.

Sit down with your lawyer and discuss your situation thoroughly. Ask what he/she would do about cars if in your shoes.[/QUOTE What would you do if you only had 1 year left on both cars? I could trade them in (both are in good condition) and get something that would last me should I file for 13... How would that look though? Buying new cars right before filing?

[catleg]

I chose to purchase and finance 2 used cars with 6 year loans because we have about zero chance of getting a ch 7 and I wasn't particularly happy with the two paid-up cars that we already had and I had to act before our credit went too bad on us. My payments are a little higher than the ownership allowance they give you in a ch13. Luckily, since you already have a payment, you can still use that expense if you go the chapter 7 route.

I hate to encourage anyone to get into debt but if you're feeling fairly secure about your job and fairly sure you'll get stuck in a ch13 it might be worth considering. I felt like , I'll be damned if I'm paying some credit card with money I could be spending on a car for myself.