loss of collector car if I file 401k?

[codycr6]

I am going through a divorce, and my wife had run up considerable debt in my name. The lawyers are saying the courts can't do much to enforce her paying her half, even if the judge finds she is liable for half. My cars are paid for, just house and credit card debt. I drive a 1999 Expedition, but also have a 1964 Fairlane that I have owned for 23 years (Father/son project starting when I was 12). Insured value is $26,000, but liquidation value is probably $12,000 or so. Not something I bought, but built over decades of time, and I don't think anything on my credit cards would have anything to do with my Fairlane. Would a creditor be able to come after the car? There has never been a loan on the car, my truck has been paid off for two years or so, and I don't mind loosing my house as I have been trying to sell it for over a year anyway. House valued at $176,000 three years ago, and I have had it for sale for $125,000 (which is $10,000 less than I owe). Probably 90% of my income right now goes to just paying creditors, with barely enough left over to buy groceries or gas.

[Pandora]

In either Chapter (not sure what you're looking at filing - 7 or 13) you would have to be able to exempt the equity in order to keep the vehicles - or buy them back from the Trustee in a 7 - or if looking at a 13, same thing applies (exempt equity), and if you cannot, then any non-exempt would have to be paid back through your plan. What are vehicle exemptions for your state?

[AMISLANDER]

I had to pay to keep my paid off SUV in Florida; check with your attorney re: exemptions.

[codycr6]

?

Don't know about the vehicle exemptions, just joined the site yesterday and started reading. I didn't see where anyone posted about a collector car that went way back in the owner's history and had never had any debt against it. I will try to look into it tonight.

[keepinitreal]

loss of collector car if I file 401k?

Probably 90% of my income right now goes to just paying creditors, with barely enough left over to buy groceries or gas.

Not sure what the 401K is about.

If 90% of your income is going to creditors, it would seem you should get a free consultation with a bankruptcy attorney and find out if you qualify for a Chapter 7.

I would suggest that you try to get the largest car loan you can on your 2 cars and use the cash to pay the attorney fee, car payments, and household expenses. The less equity you have in your cars, the better chance you'll have keeping them.

Good luck!

[ValleYum]

Mississippi's exemptions aren't super generous:

Mississippi personal property exemptions

This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.


* Federal tax refund to $5,000
Miss. Code Ann. § 85-3-1 (j)

* Mobile home to $30,000
Miss. Code Ann. § 85-3-1 (e)

* Personal injury judgments to $10,000
Miss. Code Ann. § 85-3-17

* Sale or insurance proceeds for exempt property
Miss. Code Ann. � 85-3-1 (b)(i)

* State health savings accounts
Miss. Code Ann. � 85-3-1 (g)

* State Tax Refund to $5,000
Miss. Code Ann. § 85-3-1 (k)

* Tangible personal property to $10,000: any items worth less than $200 each; furniture, dishes, kitchenware, household goods, appliances, 1 radio & 1 TV, 1 firearm, 1 lawnmower, clothing, wedding rings, motor vehicles, tools of the trade, books, crops, health aids, domestic animals (does not include works of art, antiques, jewelry, or electronic entertainment equipment)
Miss. Code Ann. § 85-3-1 (a)

* Tax-qualified §529 education savings plans, including those under the prepaid Mississippi Prepaid Affordable College Tuition (MPACT) Program
Miss. Code Ann. § 85-3-1 (f)

I don't even see a possible Tools of the Trade Exemption available for him to use.

[codycr6]

401k

Not sure what the 401K is about.

If 90% of your income is going to creditors, it would seem you should get a free consultation with a bankruptcy attorney and find out if you qualify for a Chapter 7.

I would suggest that you try to get the largest car loan you can on your 2 cars and use the cash to pay the attorney fee, car payments, and household expenses. The less equity you have in your cars, the better chance you'll have keeping them.

Good luck!

Sorry, it shortened my title! Just also was curious as to if bankruptcy affected my 401k account?

Also, as far as my collector car, with the market being so bad right now, I don't know that it would actually sell for more than $10,000 if I had to liquidate quickly. Yeah, with plenty of time, it might bring $15,000 or so, but probably not on today's market. If they did see it this way, what would I have to do to make sure I could keep it? My Dad would loan me more money if I needed to "buy" it back, but would I just have to pay the amount over $10,000 that it is worth? I have a junk non-running 71 VW and an Mustang with no engine that I was building as a race car before I got married, but the VW is worth less than $1,000 and the Mustang may be worth $4,000-5,000. The VW I have had for 15 years, the Mustang for about 6.

[keepinitreal]

Sorry, it shortened my title! Just also was curious as to if bankruptcy affected my 401k account?

Also, as far as my collector car, with the market being so bad right now, I don't know that it would actually sell for more than $10,000 if I had to liquidate quickly. Yeah, with plenty of time, it might bring $15,000 or so, but probably not on today's market. If they did see it this way, what would I have to do to make sure I could keep it? My Dad would loan me more money if I needed to "buy" it back, but would I just have to pay the amount over $10,000 that it is worth? I have a junk non-running 71 VW and an Mustang with no engine that I was building as a race car before I got married, but the VW is worth less than $1,000 and the Mustang may be worth $4,000-5,000. The VW I have had for 15 years, the Mustang for about 6.

Bankruptcy shouldn't affect your 401k account. Sometimes the Trustee will want a filer to reduce or stop contributing to a 401k if the contribution is high. The account itself is safe though. No creditor can get to it as long as you don't make a withdrawal.

I don't think a Trustee would want to take a junk car or a car with no engine and try to sell them. Your other 2 vehicles might be tempting if you have no loans on them and a lot of equity after subtracting your exemptions.

It would certainly be worth laying all your cards out to a bankruptcy attorney at a free consultation and finding out what your options are.

[codycr6]

Your other 2 vehicles might be tempting if you have no loans on them and a lot of equity after subtracting your exemptions.
This is the part that I am not too sure about. My daily driver is probably worth $5,000, nothing against it. All of my debt is either credit card (wife ran up) or my house. I reduced the amount I contribute to my 401K from 10% to 6%, which is what my company matches to. Credit card debt is around $30k, house I owe $132k on and have had on the market for over a year, currently at $125k. My credit record was great until I got married, everything but my house was paid for, only had two credit cards and the highest my balance ever had been was around $6,000, which I paid off in less than a year. The wife messed all that up with me putting her through school and her using my credit cards because she had no credit. She asked for a divorce 2 weeks after she graduated, and now makes $22 per hour! Left me with all the debt, and the lawyers tell me they can't force her to pay it back.