Could I sell my car to pay student loans?

[twuoo]

Just wondering if there would be any problems with selling my car, worth maybe $6-7K, to pay towards some student loans as those are not dischargable. I'm not intending to file until around Sept/Oct.

Thanks for any input.

[SinkingFast]

We sold our truck in March to pay our Income Taxes. We filed in September with our 341 in October. The IRS was the only "Creditor" we paid in 10 months prior to filing.

Our attny said before we filed, there wasn't much the Trustee could do. We converted a Secured Asset to pay a Priority Creditor. The Trustee was not gonna go back and ask the IRS for the money.

At our 341, the Trustee did ask about the sale of the Truck. Who we sold to. How much we made from the sale. And where the proceeds went. When he heard we paid our taxes, and then referenced our filed taxes, he let the matter drop.

You're kinda in an "iffy" time period prior to filing. It's a good Creditor. I don't think that would be a problem with the Trustee. Paying Student Loan Debt. Just the timing prior to filing might be questionable.

I'd suggest you ask your attny what he/she thinks. Your attny knows your Court and the Trustees you might draw. Your attny would have a better feel for if it's OK to sell the car now or not.

[HHM]

Why pay student loans with the proceeds, the interest rate on student loans is low (relative to other credit, i.e. credit cards), you can put them in deferment, hell, you can stop paying them with little consequence (at least for a while) it would be a waste of money to pay student loans in that manner.

[twuoo]

Ultimately, student loans will need to be repaid. While is interest rate is relatively low, it's still accruing.

From what I've read, it seems there is great consequence to not paying the loans. Namely, the government can really get on your case.

Currently, I have two vehicles. I'd rather not spend money towards insurance on the second vehicle as I really only need one.

Even so, I'm still a no asset case. I could use the federal exemptions and keep both the cars.

[SinkingFast]

If it's an Exempt asset, then file BK, and sell the car later. After the dust settles. A few more months isn't gonna be a significant difference on the interest due.