moving out of state and want to sell my car and keep the cash how to go about this?

[kst7488]

the title basically says it all. im moving to jersey in june, and am in my first year of ch 13 repayments.

if i sell my car to a private buyer how would the br trustee find out and ask for the money? how do they know? i own the title and the car is paid in full.

also, if they deffinatly will find out, cant you when you transfer the title just write down you sold it for much less or gifted it?

there has to be a way around this that i can work out....

btw the car is only worth about 6500-7500 and im in ohio if that helps.

i rarely come on here and you guys are always so helpful when i do i deffinatly need advice, thanks!

[justbroke]

I believe that any property that you wish to sell, cars and definitely homes, you need to get permission from the Court. This is because in a Chapter 13, you must provide all disposable income to the supervision and control of the Trustee. And, while property does revest with the debtor (you) after confirmation, property is still (really) under the supervision of the Court and Trustee.

Also, was the property (car) exempt on Schedule C? If so, would the proceeds remain exempt? (May depend on underlying non-bankruptcy law and Local Rule.)

[kst7488]

would the court actually grant permission though? i imagine they would just ask for the money, but whats the point? i mean what if my car got totaled and i got reimbursed by my car insurance would the courts try to take that?

seems odd to me.

if the court ends up wanting the money then why file 13 in the first place???

[welovedis]

in our paperwork it says we are prohibited from transferring, encumbering, selling, or otherwise disposing of any personal or real property with a value of $1000 or more other than in the regular course of Debtor's business affairs without first obtaining court authorization.

[justbroke]

would the court actually grant permission though? i imagine they would just ask for the money, but whats the point? i mean what if my car got totaled and i got reimbursed by my car insurance would the courts try to take that?

seems odd to me.

if the court ends up wanting the money then why file 13 in the first place???

The reason is, to make sure you don't convert it to cash or otherwise abuse the system.

For example. Say that you're about to file and have one car with a loan. You decide to buy a second car just in case. You buy this with cash and you end up exempting the car (due to your State's generous vehicle exemption and/or wildcard exemption).

Then after the plan starts, you're getting the Ownership Allowance for 2 cars, and you have exempted a bunch of cash.

Now you want to sell the 2nd car and convert it to non-exempt cash? While you may not think that's a loophole, it is. The court wants to know about disposition of property. If you're just replacing the car, you still need court permission.

This whole BAPCPA was because people were abusing the bankruptcy system by moving things around.