we own our car- filing Chapter 13...attny says to sell and buy another w/payment

[momofthree]

what do you mean "when you finish you would have a newish car paid in full"....do you mean the car terms end and is considered paid off when your BK is discharged? or so you mean it would end the same time as your BK is discharged if the car loan is taken out on a 60 month term...and your BK is also a 60 month term?

or do you mean if your BK is 36 months...but you sign a 60 month car loan....the car loan is considered paid off when the BK is discharged?

thanks for your help.
Michelle

No. I was automatically assuming a 60-month term for both the loan and the bk. The auto loan terms remain the same. If you pay the loan outside the bk, you will still have a car payment if your loan term is longer than your bk term. If, however, your car is included in your bk plan, it must be paid in full within the bk term. For example, we financed our car on 72 months, but it is paid thru our bk and must be paid off within 60 months instead so they are paying more than the min. payment towards our car each month.

[pcmbates]

ok. I got it.
now the only part I didn't get is where you said you had to wait the 90 days?
also...when they say you can buy 12 months of food w/money that I make from the car sale...can you buy gift cards to grocery stores?
also...is it "legal" to buy pre-paid Visas?

[RunningMan]

I don't see why they would question that before you file, but check your exemptions. The gift cards and prepaid Visas are technically assets. It is probably not any different than putting the money in a savings account. As long as it is exempt, they won't touch it. If it is non-exempt, you can still keep it in a chapter 13 as long as you are paying the unsecured creditors the amount of the non-exempt assets. If you spend they money on a home or car repair, that is not a new asset and probably adds minimal value to the house or car.

[momofthree]

Agree with Runningman. I didn't mention anything about 90 days, maybe that was someone else. You may want to make at least 1 payment on the new vehicle to show good faith, but I don't think that is even a requirement. I don't think you can buy 12 months of food or gift cards. I did say you should prepay your car insurance for 12 months, that won't be questioned at all. You could probably get 1 month or so of grocery/gas gift cards. We bought a $200 gas card and about $500 worth of groceries (actual groceries, not gift cards) right before filing and it wasn't an issue. We also stocked up on a year's worth of our son's meds (not covered by insurance), did all our vehicle maintenance, etc. We had a $5000 tax refund that we had to spend down within about 1 week's time, and I was surprised how quickly it went!

[LadyInTheRed]

Somebody did mention waiting 90 days after purchasing a car to file. If you incur debt over $500 with one creditor within 90 days of filing and the creditor objects to discharge, the debt will be presumed to have been incurred fraudulenly and that debt would not be discharged. Since you will pay the new car loan and it will not be discharged, the 90 days will not be an issue. My guess is that the poster who waited 90 days did so out of extreme caution. I filed BK about 40 days after financing my new car. No questions were ever asked.