Filing C7 in a few weeks, questions on paid off auto

[duplantisjj]

Well, I been soaking in this forum for 3 months now and based on forum consensus....I have stopped paying and charging my credit cards since Dec 18. Oh Yeah......the phone calls are deadly My situation is basically from a failed business that left me with $100K in credit card debt. I had to change my phone numbers as they were calling all day and all night.

My question is: I have a 2002 Chevy Truck that is paid off. I am quite partial to it as it has won car shows and is highly modified. I'm in Alaska and the current exemption is $3,750 while the FMV for a standard vehicle in my class is aprox. $12K. I don't have an extra $8-9K lying around so; are my only options to pay the trustee the non-exempt amount or get a 722 Redemption loan (if that's possible?).?? Any ideas?? Everything else on my case is pretty cut and dry, no assets....I just don't want to loose my vehicle that I spent many many hrs working on.

[sharksfan]

I owned a 2002 Explorer outright about a month before I filed. The NY exemption is $2500 and the vehicle was worth $5000. My attorney advised me to trade it in on a new vehicle as that is too much money for the trustee to walk away from.

[keepmine]

Well, I been soaking in this forum for 3 months now and based on forum consensus....I have stopped paying and charging my credit cards since Dec 18. Oh Yeah......the phone calls are deadly My situation is basically from a failed business that left me with $100K in credit card debt. I had to change my phone numbers as they were calling all day and all night.

My question is: I have a 2002 Chevy Truck that is paid off. I am quite partial to it as it has won car shows and is highly modified. I'm in Alaska and the current exemption is $3,750 while the FMV for a standard vehicle in my class is aprox. $12K. I don't have an extra $8-9K lying around so; are my only options to pay the trustee the non-exempt amount or get a 722 Redemption loan (if that's possible?).?? Any ideas?? Everything else on my case is pretty cut and dry, no assets....I just don't want to loose my vehicle that I spent many many hrs working on.

I'd sell it and, buy or finance something reasonable-just don't go over the exemption for your state and put the balance in something that is an exempt asset like, an IRA. Talk with your lawyer about timing issues. A 6 year old truck is just a thing. One day, you'll get another one to modify.

http://www.bankruptcyinformation.com/AK_exemp.htm

Looks like IRA's need to be funded 120 days before you file.

[duplantisjj]

OK..thanks...will have to consider selling it Which brings up another question. I can likely sell this vehicle quick and for over $15K. The maximum value car I can own under C7 in Alaska is $25K. Since I haven't filed yet, what happens to the money from the truck sale? Do I have any options to use the cash from the sale other than turning it over to the trustee? I am only allowed to have $1,750 cash in my bank account at the time of filing. With the $15K from the sale minus say $5K down payment on another car, leaves me $10K. Obviously I don't want to contribute too much to the equity of another car just to have to come back and make up the non-exempt difference. Maybe I could uhhh spend it on new parts for the new car

[HHM]

The maximum value car I can own under C7 in Alaska is $25K.

Where does that come from? Although a person filing chapter 7 cannot own a really expensive car, I have never heard of a codified, specific dollar value limitation.

Keepmine, that website that you linked, I have found tends to have out of date information.

In your situation, many people will slowly bleed the cash and delay filing. So if you do sell the truck, you simply spend the money on things you have been putting off (if any), (home repairs, car repairs, doctor, dentist, buy excess groceries etc etc).

If you are partial to the truck, you may just want to do 722 redemption financing, I know it is not ideal, but it is one option. The reality is, you have a non-exempt asset, all you can do is either give that money to the trustee, do a redemption loan, or sell the truck and spend the money before filing. (but the spending has to be reasonable, if you sell the truck and go on a 2 week south-east Asian cruise, that will not fly).

[duplantisjj]

Where does that come from? Although a person filing chapter 7 cannot own a really expensive car, I have never heard of a codified, specific dollar value limitation.

Keepmine, that website that you linked, I have found tends to have out of date information.

In your situation, many people will slowly bleed the cash and delay filing. So if you do sell the truck, you simply spend the money on things you have been putting off (if any), (home repairs, car repairs, doctor, dentist, buy excess groceries etc etc).

If you are partial to the truck, you may just want to do 722 redemption financing, I know it is not ideal, but it is one option. The reality is, you have a non-exempt asset, all you can do is either give that money to the trustee, do a redemption loan, or sell the truck and spend the money before filing. (but the spending has to be reasonable, if you sell the truck and go on a 2 week south-east Asian cruise, that will not fly).

The exemptions I mentioned were from the Alaska Bankruptcy Court Handbook (also it's in the NOLO book) and you are correct. The site posted above has outdated exemptions. But in AK, you are allowed the total value of a vehicle to be not more than $25K and not more than $3,750 in equity. Sort of limits things to mid-to-econo cars. I have a decent job and make good money, just not enough to pay over $6K/mth in credit card bills left over from a closed business. Actually, that's about what I make every month. And really for me, the hardest decision in filing is what to do with the truck. Paid it off in 3 yrs with zero interest, now the decision to pay for it again is tough. Everything else is covered under AK exemptions. But that 2-week south-east Asian cruise sounds sweet....such a pity.

[HHM]

Can you provide an actual link to the $25k total value limitation?

[duplantisjj]

Can you provide an actual link to the $25k total value limitation?

Here ya go:

http://www.akb.uscourts.gov/ Go to Filing on you own, Look in the Pro Se Handbook, page 54, it states vehicle may not exceed $24K total value. But that figure has been updated in 2008.

Also here http://research.lawyers.com/Alaska/B...in-Alaska.html

This site says $250,000 total car value...I'm sure it's a typo and should be $25K http://www.thebankruptcysite.org/exemptions/alaska.html

Also I'm using Bankruptcy Case software by National Lawforms, Inc., and it has the latest exemptions updated in their system which has the same max value of $25K and $3,750 max equity.

I'd be tickled pink if you could find me a way around that $25K max value as my truck would make a nice down payment and a decent set of wheels.

[SUB]

Isn't it an 'either or', state or fed rule when filing?

If fed exemptions work better, go that way.