New car question

[pambysue]

I am sorry to be such a pest with these car questions..but, I am utterly paranoid about purchasing anything with filing BK in the next couple months. I found a car (mine is dying a slow death..needs a new tranny!) however I need about $800 for the down payment. I have my tax refund of $606 coming in next week. Does anyone here know if it would be a BK no-no to use the $606 towards the car? I could make payments on it of about $200 per month over the next year. Like I had said before, I need a car to get to work. would this be considered a legitimate expense to use the tax refund for? Am I allowed to have a recently purchased car payment when I file BK? I told the lender that I am filing BK soon and he said as long as I continue making the payments I could keep the car.
I had found a car that I could pay cash for, but by the time I went there, it was already sold Everything else I see that is semi reliable is way out of my price range to pay cash for.
I live in NY state (western) and I really dont know anything about the exemptions allowed here.
Thankyou all so much for listening to my woes all the time..lol!

[keepmine]

I live in NY state (western) and I really dont know anything about the exemptions allowed here.


This sentence is scary. You better get up to speed on those exemptions in order to avoid a nasty surprise when you file. Do you have a lawyer?
IMO, your refund is yours to spend if you receive prior to filing. Reliable transportation is a necessity and a modest car payment is not deal killer in bk.

[HHM]

To answer your basic question, yes, you can use your tax refund as a down payment. There is, generally, nothing wrong or fraudulent with taking non-exempt assets and making them exempt prior to filing BK.

If you need a car, you need a car. But just make sure you can really afford it, you said something about making $200 payments for 1 year, what happens after a year?

[BK'd-Betty]

If memory serves - the car exemption in NY is $3,000.00

But I'm Old Law - so it might be different - and I'm too lazy to look it up. So perhaps I should've just kept my mouth shut

[pambysue]

Thanks all! The car would be paid off in about a year or so (15 months). The dealer told me after the down payment, it would cost around $200 monthly (i figured around $240 per month). As for the exemption, is that the amount of equity you are allowed to have in a car? Just as an example..if I had a car that I owe $4000 for and it was worth $4200, would that mean I had an asset of $200 to claim? Or, if I had a car that I owed $4000 for but it was only worth $3000, would that be considered a negative and wouldnt effect the 'asset' part of the exemption?
And Yes, Keepmine, I have an attorney, but when he asked about my possessions, he pretty much just shrugged it all off because, I basically have nothing other than my few pieces of furniture, 1 19" tv and our beds. I think thats why I am so concerned about paying a lot for a car. and yes, 200-250 monthly is IMO a LOT to pay considering I havent had a car payment in several years. But, it is a necessity and I just cannot find anything for under $1000 cash that doesnt need a lot of work.
I really hate taking on debts just prior to BK. I have downsized my life immensely over the past year just trying to avoid BK..but, if I am not paying my cc bills and other old misc debts that have surfaced recently, I can afford to pay for a car. It would be more feasible to make car payments in that amount for the next year than it would to put $1000 into my 1995 van that has 200,000 miles on it. I figure it wont be long before the engine seizes up.. as my check engine light has come on
I really HATE cars! lol

[lrprn]

I live in NY state (western) and I really dont know anything about the exemptions allowed here.

According to Legal Helpers at http://www.legalhelpers.com/legal_he...ptions_ny.html , you have a $2,400 exemption for a car. Take a look at the other NY exemptions here, pambysue - these are written in non-legal language that's easier to understand than some of the other exemption sites.

[pambysue]

thankyou so much for that link, lrprn! It really helps. I have added it to my favorites so I can refer to it for future reference!

So, please correct me if I'm wrong..that would mean I would be allowed $2400 EQUITY in a car, right?

[SinkingFast]

You're right, Pamby. For Exemption purposes, they are talking about your equity in the car. Not the total value of the car.