Car question

[iupui1299]

I have a question. My wife and I have 2 cars. We are going to be filing chapter7. One of the cars carries a high payment. We are thinking about claiming it in our BK and trying to get a used cheaper car. My question is since we need 2 cars......what are our options on getting another one? Can we go to a bank with our already bad credit and get a loan or will that mess up the BK? Or can we get a family member to give us or get a loan for us and pay them. Will the payment to them be exempt in the BK? Thanks for any help!

[SinkingFast]

Are you gonna reaffirm one in the BK and let the other go back?? Is that what's up here??

What ever you do, do not take a loan from family that you have to declare or make payments on right now. That's Preferential Payments to Insiders and the Trustee will go after that money in a heartbeat.

You might have some trouble short term, but become a one car family, "officially" until at the very least, after your 341 Meeting. After Discharge would be much better.

If you've got family that is willing to lend you money to buy an old beater to get you by, maybe the family member can buy the car in their name for the short term and "lend" the car to you to use. That way, the Title isn't in your name to become part of the BK Estate. If you catch my drift. Then, down the road, you can transfer the Title, with the loan listed on it, into your name. That way, the Trustee won't find an unencumbered asset later that he/she will try to take and sell.

[iupui1299]

Yes, we are going to reaffirm one and let the other one go. We need 2 cars so we were thinking that family could get a loan in their name for the car and then we could pay them per month until we were in a good enough situation to buy it off of them.

[bkadv]

I'd say wait until discharge. Offers abound once the discharge goes through I've found. Getting the family member to take out a loan for you may be a bad idea in the long run.

[SinkingFast]

This could get so tricky in so many ways.

If the relative had the money sitting around to out right purchase an old beater for you, a few thousand dollars tops, that would be one thing. But to go out and take a loan to buy a car on your behalf. That's a whole different ballgame.

It's enough of an insurance/liability issue for us with our kids driving cars that we own and insure. THE rule is no friends in the car. NONE. Only family. Because if something happens it's our butts, mine and Hubby's, on the line.

While it's nice to know you have that kind of support in your family, I personally wouldn't do it. I've heard too many horror stories. People who thought the person was their nearest and dearest friend in the world turns on them and sues them over an auto accident. Financial deals gone sour that rip families apart.

I don't know if I'd get into this or not.

Just my $0.02 worth there.

[iupui1299]

It's definetly a tricky situation...but we need 2 cars and it would be wise to get rid of the high car payment and get a used car. The family willing to get the car can be trusted....I'd trust them with my life and they the same with me. We would buy the car from them as soon as we could once the BK was over. It's either go this route or keep the high car payment. We will be living with this family as well. So the car would be at their residence. Basically, we are just using their car and then will purchase it from them as soon as we are able to.