I'm filing for a 7 in three months but can I do this?

[btbeme]

How much gas can you buy for the price of a motorcycle?

[tcreegan]

Hi Allmyfault,

Here in Colo they didn't care about the # of vehicles, just how much equity you were trying to exempt. Your reason for buying the motorcycle is perfectly reasonable, the worst case scenario is probably not being able to use it as an expense.

Don't worry about an interrogtion by the judge, the trustee will ask a few questions and for most folks that is under 20 minutes tops. (unless there is something complicated about your case) Remember that BKs are business decisions and it all goes by the numbers.

justbroke has some great advice and good things to ask your lawyer about!

Tom in Colo

[justbroke]

I don't think I can use the 22k wilcard since I actually have equity in my home and I will be exempting 75k there.

Well, in your case, you'd need a loan from family, friend, of 722Redemption/USBank. Or raid your 401(k), which I don't recommend anyhow.

[AllMyFault]

I don't think I can use the 22k wilcard since I actually have equity in my home and I will be exempting 75k there.

[justbroke]

If you were able to "pay cash" wouldn't the judge want to know where or how you came up with the cash? Could this be a loan from a family member or friend? Would the court care if it was used to buy back a car or etc?

You live in California where you have almost $22K in a wildcard exemption under System II! No one will wonder! In other States, like Florida, you have to show where the funds would come from -- that are exempt. This usually means raiding your 401(k) or other exempt account.

You could get a loan from a family member or friend as well. Some people even get "real" loans from places like USBank or 722Redemption in order to do this. (Note that USBank and 722Redemption have really high interest rates for redemption that sometimes make this unpalatable.)

[AllMyFault]

thanks for all the justbroke...much appreciated!
You said:

This usually means that you need to find "new" financing or be prepared to pay cash for the vehicle.

If you were able to "pay cash" wouldn't the judge want to know where or how you came up with the cash? Could this be a loan from a family member or friend? Would the court care if it was used to buy back a car or etc?

[justbroke]

How do some people 'make deals' with their creditors to buy cars and etc. from them at big discounts? How exactly does that work?

The key is, that the debtors "don't" make deal with the creditors. The debtor utilizes something in the Bankruptcy under Section 727 known as a Redemption. The Redemption law allows a debtor to pay the "current" market value for the car by redeeming the claim/account. This usually means that you need to find "new" financing or be prepared to pay cash for the vehicle.

This is extremely common. I redeemed my SUV that had a balance of $21K for $8K. The creditor didn't "deal" with me and actually wanted to fight me over the redemption for $12-13K. I won. SO, it's not a "deal" for the creditor. They are forced to do this because this redemption "hearing" goes before a Judge and the Judge is the "finder of fact" to determine what the current market value is of the vehicle. (Noting that "current" market value for redemption is the "wholesale" value (or trade-in value) for the car, not the clean-retail that most creditors try to force upon the debtor.)

Hope that helps.

[AllMyFault]

How do some people 'make deals' with their creditors to buy cars and etc. from them at big discounts? How exactly does that work?

[AllMyFault]

Nope courts don't keep track - it's the creditor's problem. Your friend got a free ride! No pun intended. LOL.

Well, he can't really do anything with it since he doesn't have the title.

[drowning123]

Nope courts don't keep track - it's the creditor's problem. Your friend got a free ride! No pun intended. LOL.

[AllMyFault]

another thing:
a friend who had gone through a BK two years ago had a motorcycle as well...he didn't want to reaffirm and keep it he wanted to turn it in...the creditor never came and got it and he still has it today...how does that happen? Doesn't the court keep track of whether or not creditors get back their 'asset's'?

[AllMyFault]

Any of you Californian's dealt with something like this?

[drowning123]

There's no judge at the 341 meeting.

[justbroke]

The only question on the motorhome, will be if it's a "motor vehicle" or a "residence". If it's a residence, then it's no different than an investment property. You can keep it because your payments are on time and you operate it as a business -- by renting it out. Any excess you have after paying the monthly payment and any taxes and other fees, would be "income". In Florida, they tend to go by... if it moves, it's a motor vehicle. If it is relatively permanent and doesn't move, it's a motor "home".

Anyhow, this is a great question for someone that has dealt with this in California.

[AllMyFault]

You will have to claim it as income. It is basically having a renter even though it is family.

Right, and I'm still below the median income allowed but will they allow me to keep the 'vehicle'?