Take a title loan on a truck before filing Chapter 7

[claraclownie]

My husband and I may be forced to file Chapter 7 because of a personal guarantee on a real estate development. My car is leased which ends this week. My husband's truck is paid for and is worth about $9000. Is it possible to take a title loan on the car before we file? We would reaffirm and make the payments. We just don't want to lose our only vehicle. We won't file till the lender attempts to enforce the personal guarantee which could be weeks or months.

[dscurlock]

My husband and I may be forced to file Chapter 7 because of a personal guarantee on a real estate development. My car is leased which ends this week. My husband's truck is paid for and is worth about $9000. Is it possible to take a title loan on the car before we file? We would reaffirm and make the payments. We just don't want to lose our only vehicle. We won't file till the lender attempts to enforce the personal guarantee which could be weeks or months.

If it was my only paid off vehicle, then I would not even
consider a title loan..you would get no where near
the $9,000 - and if you were to default on the title
loan..then you loose your only vehicle...

I am not even sure about paid off vehicles and Bk, so
I will not even go there, what is allowed, not allowed..etc..

I just know that I would not risk the only vehicle I had...

[claraclownie]

Just talked to the bk attorney we consulted about about the business bankruptcy. He said go to our credit union and get a small loan (about $3000K) and we can reaffirm the loan. That way it can't be grabbed-- because we can double our exemption on the car in Missouri. Hope this helps someone else who has a fully paid for car/truck.

[justbroke]

Just talked to the bk attorney we consulted about about the business bankruptcy. He said go to our credit union and get a small loan (about $3000K) and we can reaffirm the loan. That way it can't be grabbed-- because we can double our exemption on the car in Missouri. Hope this helps someone else who has a fully paid for car/truck.

This depends on what State you live in and what exemptions are available. I can tell you easily, that a vehicle worth $9000 that is only encumbered by a $3000 loan, is going to be snatched by the Trustee in Florida. But you're not in Florida and I mention that just for other readers.

Since you're in Missouri, and if this is the only car with equity, then this would work, since you can exempt $3000 per debtor in your Bankruptcy case.

You could also, still exempt the car, and just offer the Trustee $2K (or some really thought about number other than the random number I throw up here), to keep the car.

Whatever is easier I guess. I just don't understand elaborate schemes to keep property, by encumbering it with a loan that's probably going to cost you a LOT more than $3K in the end. Just my opinion.

[DeadManCrawling]

To add to what JB said:

The vehicle exemption in FL is only 1k, IF you are using the homestead exemption.

If you are not, there is a new wildcard (doubled for married) that can be applied to any assets, including vehicles. It came in very handy for us, since we have one vehicle fully paid off worth about 7k.

You really want to explore all exemptions available in your state or via federal exemptions. There are some little-known exemptions that even attorneys rarely mentioned when we were consulting around. For instance, the 6 month wages in bank exemption for head of household in Florida. That exemption allowed us to preserve an extra 3k at filing time.

Research your exemptions carefully. If you miss an exemption, you stand to lose.

[justbroke]

Also, you have an additional "wildcard" exemption in Mo. Statutes 513.430 and 513.440, but I don't know what type of household goods you're exempting in that category. You might be able to exempt the whole thing... in Missouri.

(This is for debtors filing in Missouri and people in Florida need to be very concerned with having $9K in equity in a motor vehicle!)

[claraclownie]

Attorney said we could couple the $3000 each exemption to $6K. He suggested a credit union for a $3000 loan.