Question again reg car in chapter 13 >

[mesa777]

Please help me in regards to another car question.. I live in AZ.. have two cars.. my dad drives one, in my name, is financed and owe approx $14K on it.. new car, not much equity...

My car is a newer car.. has a $5K lien on it, worth probably $20K total... equity is around $15K.. was told only way to keep car is to file a Ch 13 and make payments.. what happens if I pass the means test and can file a Ch 7? No way I can afford to make Ch 13 payments.. this car is starting to become a major problem in my life.. am thining about just trading car in, paying off the $5K lien, putting down $4500 or so on the new car and banking the rest of the money... help....

[woeisme]

You can do that, but the trustee will look at any sales close to the time of filing, and will want to know what you did with the $ that used to be equity. I'd probably still try to do the CH 7. Yes, you will have to give the trustee some of the $ that is equity in your car right now. But still beats a CH 13 in my book. What is the maximum exemption in AZ for autos? I'd sell the car, pay the lein (keep records!) buy a car up to the max allowed exemption in AZ, use some of the $ to pay the BK lawyer and other necessary expenses that you can justify to the trustee. Ask that lawyer you hire for ideas on justifiable expenses, I'm thinking any medical, dental, utilities, etc. types of things that will fly with the trustee, and hope you can exempt the rest with AZ allowances. It might be worth it to be out a few grand of car equity to the trustee if it gets you out of other major debts though, and keep you in a CH 7 instead of chained to a CH 13 for 3-5 years.