Need some input on future bk~ please

[copperarab]

Hi All!! I am reposting this here in hopes that it might get answered vs where I originally put it (exemptions)


I am in Oklahoma... will be filing for divorce in the next 5 months, after THAT is over, will most likely be filing bankruptcy.

I have been reading, but still am confused. I currently have a 2005 car that has payments still. I am HOPING to get enough out of the house equity (my 50% share) at the divorce to pay this car off in full or close to it. The car is currently blue-book valued at $18000, owe just over $16,000 at the moment. Give it another year before I file bk, the car value will be a touch lower.

Here in OK there is a vehicle exemption of $7500. What would this mean to me? IF the car was paid in full OR almost paid in full? I will be VERY poor after the divorce as a fulltime college student/parttime worker raising a 4 yr old grandchild and receiving state aid ( AND HOPEFULLY some type of alimony after a 16 yr marriage) I will have no other assets and will most likely be well below the poverty level for 2 people.

Will I be forced to sell the car? It will be the only nice thing I have..... PS: Car is in husbands name only right now. Was a gift 2 yrs ago from him. Not 100% sure I will even get it in the divorce.

Additionally, I have not held a job in several years due to having legal guardianship and raising my granddaughter that has some medical issues. I will file for a BK7 with just the car as an asset, old furniture, and be living in a one bedroom cheap apartment.

ANYTHING you can throw my way would be immensely appreciated!!!!!!

Question: Pay off car before bk7 or not??

Thanks!!!

Lisa

[BKTango]

Well I guess you need to first find out whether or not you would get the car in the divorce.

Second thing is...it's in his name. Not sure how that would play out in your bk.

If you pay the car off, that would mean you have total equity in the car, so what's it's valued at is what your equity would be. If that would be more than the states exemptions, then more than likely a trustee could sell it and refund you back the exempted amount...i.e. $7500. I THINK that is how it would work, maybe someone who is more familiar can come along and give their imput.

Also when you receive your home equity share, depending on it's amount, and do not pay off the car, before you filed bk it would be a good idea to use that money on necessary expenses so as to not have that much money in the bank when you file, your exemptions may not be able to cover it.

I honestly do not know how to handle the car being in his name though.

[copperarab]

Hi and thanks BKTango.. I am confused too. LOL

I am wanting to pay off/near pay off the car so I have one less bill to worry about (as in REPOSSESSION). I currently have over $25000 in cc debt as it is, and student loans from 14 years ago, now I am making more by going back to college.

Husband is going to fight me ALL the way. He says that HE gets the house, both cars, and I get the debts! Lovely guy eh?

I just need some input on what I should do. Once I file divorce and move out of the home, I wont have access to the web from home anymore, thats why I am trying to plan so far in advance.

[lrprn]

I am wanting to pay off/near pay off the car so I have one less bill to worry about (as in REPOSSESSION).

Unfortunately when you file bankruptcy, you are limited to the amount of car equity you can protect depending on the state you live in. Since OK allows $7,500, if you pay your $18K car off, that is going to give you a heap of equity above that.

That much value above equity makes your car very attractive to a trustee who will either seize it and sell it giving you $7500 back, or (more likely) make you pay the extra above the equity to keep your car.

Bottom line - I wouldn't pay off your car. Especially if your husband manages to wrangle it out of your hands, you will have paid off the car for him. Better to keep making regular payments on the car and use any extra money to bolster your living conditions instead.

I currently have ... student loans from 14 years ago

Just so you know...student loans are not typically dischargeable in bankruptcy and there's no statute of limitations for these loans either.

Once I file divorce and move out of the home, I wont have access to the web from home anymore,

There are free and low cost internet stations set up at public libraries and internet cafes in every major city, so please don't feel like you'll never get online again Convenient? No. But net access is there if you really need it.

[copperarab]

Thanks for the 'heads-up' lrprn....

My student loans I have been paying on up to recently, am in a Forebearance state at the moment. I do know that they are exempt from BK.

So don't pay off the car? IF I manage to wrangle 15-20k out of my share of the house equity that is going to be a BIG problem with trying to file BK!

I guess it best to go thru with the divorce first, which can easily take a year or more, THEN see where I stand for having to file.

LoL... Maybe I should put the cart back behind the horse!



~Lisa

[copperarab]

oops sorry, double posted!

[CityGirl]

Lisa, how much in debt are you? Can you avoid BK and just pay off what you owe?

[CityGirl]

NM sorry!