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Logistics of Buying a Car and Disposing of Old Car

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    Logistics of Buying a Car and Disposing of Old Car

    I have questions about the logistics of buying a car before filing. Specifically, what to do with the vehicle I would want to sell or trade-in. My situation is as follows. My income is exempt. My house has no equity, let alone nonexempt equity. (My mortgage is subsidized and that subsidy has to be repaid as a secured interest. The subsidy exceeds what I have paid down on my mortgage.) My personal property is within my exemption. I'm thinking Ch. 7 and with SS as my income, as I understand it, qualify. I've had astronomical out of pocket medical bills the last 2+ years and ended up putting too much on credit cards with zero interest, not realizing the huge mess I had gotten myself into.

    I will need a reliable vehicle that doesn't need big repairs. My old car is getting enough mileage it will need repairs soon, though it's doing great now at 144,000. If I trade-in my car, I understand I probably won't get offered much for it, though it will take down the total price. If I sell my old car after getting a new one before filing, I'd like to apply the money to the car loan. But wouldn't that be a preferential payment? I don't think I have enough personal property exemption to cover all of the proceeds if I simply put the cash in the bank.

    How have people handled that?

    Thank you so much!




    #2
    Sell the old car first and use the proceeds towards the purchase of the new car, or wait 90 days after making the payment towards the new loan to file BK. You could also use the cash to pay attorney fees.

    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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