top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

2 new cars in last 90 days

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    2 new cars in last 90 days

    I know this is similar to other questions asked but I need some advice.

    My husband (sole income) has had steadily shrinking income (sales) and we had to decide just before Christmas to pay CC's or keep our home. We decided to try and keep our home. We needed almost $3k in repairs and tires with our '03 Toyota 4Runner with 203,000 miles in late January and without the $ or CC's to get the vehicle fixed, we decided to trade it (paid for) toward a new one before the CC's trashed our credit.
    Two more months later and no turnaround in our family income, we are leaning toward Chapter 7 and meet the means test as per our 2008 and 2009 taxes.
    My newest conundrum is what to do about our '05 Acura TL with 92k miles. We need 2 cars as my husband frequently travels across the state and we have 2 kids, 1 with special needs that I need to tend to in his absence.
    We only owe about $900 on the car and would like to keep it. From our understanding of Chapter 7, we would be forced to give the almost paid for car to the trustee to liquidate and use the proceeds to satisfy our creditors.
    He wants to trade it in on another new car '11 Hyundai, thus burying a majority of the equity since a new car loses value as soon as it is titled.
    He has spoken to his Dad and he will co-sign if needed on the $14k balance on the new car.
    My questions are:
    Is there anyway to keep the paid for car without paying for it again?
    Will the trustee frown on keeping both cars considering they are both new and purchased in last 30 and 90 days?
    Will his 83 y/o Dad be entangled in our financial problems as a result of trying to help?
    Our only other asset is 2.6 acres of unimproved undeveloped land covered with trees and wetlands in eastern NC that was deeded to us from my family in 2007. It is beside my brother and mother and worth no more than $10-15k. We would like to keep it or buy back from the court as it was a gift and we would be the black sheep that lost the family land. Any advice?
    Thank you in advance for your time and help.

    #2
    Originally posted by chanel View Post
    I know this is similar to other questions asked but I need some advice.

    My husband (sole income) has had steadily shrinking income (sales) and we had to decide just before Christmas to pay CC's or keep our home. We decided to try and keep our home. We needed almost $3k in repairs and tires with our '03 Toyota 4Runner with 203,000 miles in late January and without the $ or CC's to get the vehicle fixed, we decided to trade it (paid for) toward a new one before the CC's trashed our credit.
    Two more months later and no turnaround in our family income, we are leaning toward Chapter 7 and meet the means test as per our 2008 and 2009 taxes.
    My newest conundrum is what to do about our '05 Acura TL with 92k miles. We need 2 cars as my husband frequently travels across the state and we have 2 kids, 1 with special needs that I need to tend to in his absence.
    We only owe about $900 on the car and would like to keep it. From our understanding of Chapter 7, we would be forced to give the almost paid for car to the trustee to liquidate and use the proceeds to satisfy our creditors.
    He wants to trade it in on another new car '11 Hyundai, thus burying a majority of the equity since a new car loses value as soon as it is titled.
    He has spoken to his Dad and he will co-sign if needed on the $14k balance on the new car.
    My questions are:
    Is there anyway to keep the paid for car without paying for it again?
    Will the trustee frown on keeping both cars considering they are both new and purchased in last 30 and 90 days?
    Will his 83 y/o Dad be entangled in our financial problems as a result of trying to help?
    Our only other asset is 2.6 acres of unimproved undeveloped land covered with trees and wetlands in eastern NC that was deeded to us from my family in 2007. It is beside my brother and mother and worth no more than $10-15k. We would like to keep it or buy back from the court as it was a gift and we would be the black sheep that lost the family land. Any advice?
    Thank you in advance for your time and help.
    How much equity does the car that you owe $900.00 have? There are exemptions on the equity in your car depending on what state you are in. You don't have to lose your car. I would look into your state's exemptions to see if there is enough to cover the equity in the car

    If his dad cosigns on a new car and you end up defaulting on it, the creditor can go after his dad.
    Filed: July 31, 2009
    341: September 4, 2009
    60 days: November 3, 2009
    DISCHARGED!: November 6, 2009

    Comment


      #3
      The car is worth about $12k. The state allows $2k combined vehicle exemption. That still leaves $10k. As for Dad, he is more concerned with us having 2 cars and would be more apt to pay any missed payment (he is the best). I am more concerned with my other unsecured creditors (CC's) harassing or persuing him for $ if he helped with this. Our payment would be very affordable (under $250 w/ his credit) on this car because of the $12k trade-in value. We'd much rather keep the PAID for car but don't want to lose the equity.

      Comment


        #4
        If you're trading the car in towards the new car you're going to end up with a bunch of equity anyway. You may want to consider financing 100% and then selling the car and using the cash to pay for living expenses before filing. If you're only 2-3 months behind on your credit cards right now, you should be able to easily wait another 4-6 months to file without the cards suing you.
        Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
        0% payback to unsecured creditors, 56 payments down, 4 to go....

        Comment


          #5
          I agree with comments made by 'momofthree' and certainly would not (quote): " 'bury' a majority of the equity since a new car loses value as soon as it is titled."
          Does not make any sense since that equity of course would exceed the $ 1000 FL vehicle exemption.

          BTW, you did not state if you are both filing for bk, and how the vehicles are titled. That of course could make a difference pertaining to this whole scenario.


          Would NOT get dad involved as he would lose his investment.

          Also, your NC land, I would think is up for 'grabs'..... maybe a family member can bid on it when it comes up for auction ? Can't imagine that trustee would let it slide, or allow repayment, b-u-t.... one never knows....read one time a guy got to keep all of his 3 cars... so who can tell.

          Comment


            #6
            Your conundrum is going to depend on how long you can wait before filing Bk. You could get by purchasing a new car of that price range just before filing but you still have the equity issue to deal with. So you can't trade the car in on the new one and transfer that equity or else you still have the same problem, unprotected equity and the TT will liquidate the new auto.

            If you have plenty of time to manipulate things around you might consider putting down a little bit of the proceeds from the sale of the auto, also pay up some regular lving expense and maybe consider a Roth or Traditional IRA, depending on your circumstances. You won't be able to do this manuever just before filing, as it takes planning and time between transaction dates and Bk filing date.

            Comment


              #7
              The Acura with the balance of $900. is in my name. The new Toyota is in my husbands name. We are both filing.
              The land in NC has no direct access, you must go through my brother and mothers land to get to unimproved 2 acres in rural NC. Someone suggested getting an appraisal before the courts, could assest value and just submit with filing. We are hoping that the trustee will allow my mother or brother to buy prior to discharge and forward proceeds to creditors, is this an option?

              Comment


                #8
                I scanned thru the replies but did not see this question... Do you have equity in a home you need to protect? I believe FL allows additional 'wild card' exemptions per spouse if not. That might be able to protect the land in NC.

                FL is strict on auto exemptions @ $1000 per vehicle. Selling a car for $10k profit (I'm rounding down, you probably won't get as much as you think you will for selling it/trading it in) and putting that into a new car that costs $14k is going to leave you with more than $1000 equity. I don't believe FL allows much in property (beyond the potential wild card if no home equity to exempt) but you could use those funds for needed living expenses and/or services. Such as if you have been putting off home repairs, medical/dental treatment, etc. Even using it to pay legal fees for filing BK.
                Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
                (In the 'planning' stage, to file ch. 13 if/when we have to.)

                Comment


                  #9
                  We have no equity in the home we are living in. According to Zillow.com, e appraisal and cyberhomes, we are upside down by $40k on the first and $93k on the 2nd. Can you use the wild card and the homestead exemption?
                  $12k is trade in value on a $24k new car.

                  Comment


                    #10
                    No, you can not use homestead exemption AND wildcard.

                    Comment


                      #11
                      Originally posted by chanel View Post
                      $12k is trade in value on a $24k new car.
                      Again, you're still going to end up with non-exempt equity. You need to finance 100% (or as close to it as possible) and sell the old car for cash if you want to be able to keep the new vehicle.

                      From what I have read in this forum, Florida's exemptions are a joke. It's tough to keep your stuff there.
                      Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
                      0% payback to unsecured creditors, 56 payments down, 4 to go....

                      Comment


                        #12
                        If you have no equity, you would not be using the homestead exemption to protect your house.

                        If you're upside down on the 1st, have you considered a ch. 13 to strip the 2nd? That may work out for you overall. Many districts bring the vehicle loans into the plan, and you'd no longer be paying the 2nd. Being underwater by $40k is better than being under by $133k. Its also would protect the non-exempt assets, as long as enough went to the unsecured creditors over the life of the plan.

                        Originally posted by chanel View Post
                        We have no equity in the home we are living in. According to Zillow.com, e appraisal and cyberhomes, we are upside down by $40k on the first and $93k on the 2nd. Can you use the wild card and the homestead exemption?
                        $12k is trade in value on a $24k new car.
                        Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
                        (In the 'planning' stage, to file ch. 13 if/when we have to.)

                        Comment

                        bottom Ad Widget

                        Collapse
                        Working...
                        X