What is your take? Credit cards, student debt, and cars oh my

[Grumpy2]

I have floated around the idea of bk for years. I have managed to squeeze by. Last winter I wrecked my car and it was a total loss. The silver lining was it was an unpopular vehicle that I couldn't sell. So I didn't replace it and we became a 1 car family of 5. I started paying down debts. Pretty OK right?
Well, landlord decided to sell the house and we got the boot. The cheapest rent we could find was 300 more a month. Still OK it seems. And then the ringer...school by the new place was overcrowded. So we have to drive one of our kids 15 minutes to school while the district pays to bus the other from school to school only. I work 20 minutes away now. The one car thing doesn't work anymore. I considered the hr trip on public transit, but that doesn't allow me to travel to certain locations to work etc. To top it off, I am sending a demand letter in preparation to sue the prior landlord for my deposit that they just kept without saying anything or even provide an accounting for...despite selling the house two days after we vacated exactly as we left it.

In short...I need a car I can't afford to buy. After the wreck, I am obsessed with iihs ratings...cheapest car I can find is 12,000. With taxes etc, it is 250 a month...and I could get a new car for that with a year longer term. I am tempted because I can't afford repairs at the moment if something goes wrong on used car. Am I totally crazy? What would happen if we threw in the towel 6 months from now either ch7 or 13? Would the trustee force me to sell one of our vehicles? Our total debts are around 25k unsecured. No equity in the current car. 30k in Stafford loans. I barely fall under median income at 80k a year.
My wife is looking for a job, but her only options are low wage hourly jobs since she didn't finish her degree. By my math, straight ch7 would allow us to save 300 a month if we have two cars vs being short 500 pre-bk. Is it worth it over 25k in unsecured? Strangely my credit score is still high enough to easily qualify for auto loans at their best rates. We haven't defaulted.....yet. I feel like the second car would seal our fate.

[keepmine]

$80K doesn't go very far with a family of 5 in a high cost of living area like Ca. Plus, you still have those Stafford loans out there that will very likely survive bk.
Were I you, I'd file bk and wipe out all the unsecured and start over. Ca. has some very liberal exemptions and everything you own is very likely exempt. Most bk lawters give free or lowcost initial consultations. Speak with a few and get all of your options explained.
Big thing is, get your wife employed and start trying to knock out those student loans as fast as possible.

[LadyInTheRed]

As long as you stay current on your car payments and have no non-exempt equity, you can keep them in a Chap 7 or Chap 13. Even with non-exempt equity, you could keep them in a 13. But, it doesn't sound like you have to be in a 13. As keepmine says, California has pretty generous property exemptions. Since you don't own a home, you would probably use System 2 for exemptionns which gives you over $25,000 in wildcard exemption to apply to any property. That's in addition to a $5,100 motor vehicle exemption, a $650 per item clothing and household goods exemption, and a few others.

To determine whether it is worth filing to discharge $25k in debt, ask yourself how long it will take to pay off that debt without BK. If you can't realistically do it in 5 years, that is a good indication that BK is worth it.