Buying a Car and Pre-planning?

[Bex]

If you filed Chapter 7 (esp. above median income) and bought a car beforehand, plsplspls share your experience!!

I only came up with the idea because I needed to be sure I'd get the vehicle ownership allowance for a paid-off car on the means test...now it's looking more and more certain (hopefully will see atty this week and find out for sure) so I am fairly certain I will file chapter 7 but I'm so unsure what the best thing to do or the time at which to do it with regard to my "tired iron" --I'm starting to think it would be the best thing to do anyway. I won't get anywhere near the interest rate afterward...and I really need a car before September when my son gets his driver's license.

As I said, I realize that I HAVE to talk to an attorney to get anywhere near a final decision on this, but so far, you all have been so good about raising issues that I may be missing--no worries, I'm not holding anyone here to anything, but it just helps so much to get multiple viewpoints.

Options:

1.) Keep driving 1994 Corolla --it's only got 104k mi and it's a good car
2.) Buy 2005 Corolla (or similar)
a.) with minimal down payment
b.) with $800 down to protect 16 yr old son's savings that is in my name (using the $1k wildcard exemption for a CD in that amount that was given to him by my departed uncle, if I can--can you exempt money??? It's been in a CD for at least 4 years with no change in terms or even the name of the online account!)
c.) with 1994 as trade-in
d.) some other permutation of above


If I keep both cars, I would like to make it part of the bankruptcy that I sell the 94 to my son at lowest book value ("rough trade in" at $1000 --probably as much as I could expect, but probably could sell it myself for closer to $2000) over 48 months? Most of which he will have already paid (unofficially) through use of his savings...HEY if I use his money for my down payment pre-filing, can't I just view that as partial payment for the 94? Officially, that is?

Scenario: kid makes payment of all saved lawn mowing money to mom to purchase 94...mom takes money down to car lot to purchase vehicle to replace it. Does this all seem natural and normal enough if it's, say, 4-6 wks before filing? Surely that's not enough money to raise any red flags--cash and equity combined is no more than $2k and I get a $2500 vehicle exemption--are my assets so minute as to make worrying about them ludicrous?? Would I be okay to go ahead and transfer the title?

I think he has ~$800 --if we call it even and I don't have him pay the full book value, would that be an insider payment type of issue? I never intended to charge him full value--I was thinking more along the lines of 2/3...of course, he had different thoughts ;)

Oddly, it's probably the most important part of the whole thing for me--we have never had much money, but I really REALLY don't want this bankruptcy process to be hard on him--he didn't get us in this mess and it's hard enough for a teenager without money stress or an unstable household. Of course he's already paying a dear price in listening to endless lectures on finance and my new favorite saying: "the house always wins!"

I just need to hurry and get a consultation, this is just occupying my every waking moment. Thanks so much for reading and taking the time to share your experience and definitely advise if you see something here that I should NOT do!!

[Bex]

Since no one else is interested (because maybe it's not interesting, to them, Bex?!)

In my piddly issue, I will just "close" this myself, FWIW:

I think I have decided to just keep driving my old car. The 48-hour car lust bug has passed and the thought of filing bankruptcy only to turn around and incur brand-new liabilities (both payment & insurance --I only carry liability now, plus it puts my son on the road), just turns my guts to jelly, so I will have to save up a while for the new ride.

I learned new things about a "ride through", thanks to all for that! But I would bet that, in my case (having never carried a car note before and the payment history would be so short) they would require a reaffirmation from me.

But who knows?

I have an appt for my first 30-min legal freebie on Thursday, so hopefully I can find out something else to do with the ~ $2k cash in my name that rightfully belongs to my 16 year old.



Hope everyone's having a great day!

[OhioFiler]

I wasn't able to decipher your original post. I couldn't figure out what you were suggesting.

As soon as we stopped paying our cc's in February we bought a new car for my wife. We had 5 vehicles and I sold 3 of them to create the downpayment for the new car. I knew the bk court wouldn't let me keep 5 vehicles.

We will file in August.

[whipster1]

Hard to figure out what exactly you were asking.

[zpbk13]

Same here. Could not quite figure out what you were saying. We bought a new car before our credit tanked but I am upset with myself that I was so scared our credit would be denied, I just jumped on the first vehicle we were approved for with Saturn after being turned down by Honda Financial. They offer us a 0 down 0 interest vehicle for 5 years (one the dealer picked out "just for me") and one at $500 down with 1.9% interest for 6 years - I didn't like the idea of this guy I didn't even know picking out my vehicle for me (by the way that was being driven around by all the salesmen to lunch and on errands and such) so we went with the car off the lot I picked brand new.

I now wish I would have just taken the not so new vehicle and been done in 5 years. I wasn't thinking at the time but honestly it is not worth $4,900 more to have a brand spanking new car over one that has been driven by a few guys with less than 1,000 miles on it. Sigh, live and learn.

[Bex]

I'm sorry, I get it all crystal clear in my mind, but then on "paper", there's too many WERDZ!!

And, thanks, btw, I really wasn't trying to be snide in my response, I just thought it would be a more common experience and was surprised when no one had input.



I'm basically wanting to shield my son's $1k (or $2k!) cash, so I was thinking of having him buy my car and then using it to buy my own car, completely assuring that I pass the means test and possibly saving 10% in my interest rate by financing pre-bk. Then I decided that the new car has to be a last resort...but what do I do with the cash?

What's your opinion? Isn't getting a car for kid that gets his license just prior/during/after to mom's bankruptcy filing completely natural, normal, understandable? I don't want to do anything either wrong or illegal, so if you really can't move that kind of money or transfer the title without red flags in the bk, I won't and I'll just make him the first thing I pay as soon as it's discharged if they take his money.

But it's only $1250 in the car (my state veh exemption is $2500), $230-something in one account and $800-something in another...they are both at ing direct with a 3rd which is a $1k CD that was purchased with money that my uncle gave to my son...truthfully, none of this money is "household" funds--it's my son's and I want to keep it that way. Now I'm thinking I'm probably mistaken on using the wildcard exemption of $1k on the CD, too, aren't I? Exemptions are for illiquid assets, right?? GRRRRRRRR!!!!

And I'm doing it again, aren't I?

Okay, question: how do I protect $2k that's in my name but, ethically, truthfully not mine, so that I don't cause problems with the filing or have any qualms about trying to do so...?

Geez, I'm never even going to live till my first appointment with the atty, Thursday!!

And it makes me soooooooooooo maaaaaaaaad that I should have to do all these gyrations and feel guilt and worry over this--this was certainly not the spirit of the law, was it? To take the ONLY assets--well under ANY state exemptions for a single person--from a single mother and child???? It's so little, why can't I just say "it's mine, suck it?" That's rhetorical, btw.