New car question

[rjl0206]

to all,

just got a new honda pilot with 6yrs financing at 11.2% (ouch, but better than 14% originally), I just cant fathom the thought of pay and extra year once im out of BK13 (5yrs). Im planning on filing this may/june post income tax return, my question is: If I use say my income tax return ( $7k +/-) to pay down the new car so I can ultimately pay it down faster, will that hurt me when I file bk13/possible conversion to 7? because of the now $7k equity that I paid down? thanks.

Ray

[optimistic1]

Most likely no, because you still dont really own the vehicle outright is my guess. Now, if you used the 7k to pay it off completely, and you owned it outright, and it exceeded your state allowance for a car. Then the Trustee would see that as an Asset, and sell it to pay your creditors. If you pay it off during your plan, and then 3 years into it, you want to convert to a 7, pretty sure it would be the same scenario, if it exceeds the allowance, it is an asset.

If I was you, I would stay on the safe side, and just continue to pay the car as is and use the tax return money somewhere else, but I could be wrong. I always have to add that last part in to not make myself look like an idiot BTW.

[atolar]

Ya, I would use that money for something else, live a vacation! LOL I wouldn't put it into a car right before you file!