More questions about VEHICLE situation BEFORE bk >>

[mesa777]

I am still very confused here to what I am able to do with my two vehicles before I file some sort of bk.. I have a newer car that I bought a year ago and is still financed for around 5 yrs, no missed payments as of yet and not much equity at this point.

I also have another 2006 vehicle for which I paid cash for when I did a 2nd mgt on my home over a year ago. Car worth around $25K, have a $5 lien against it right now.

My dad actually drives the first car and makes those payments, I assume that the bk court will still permit this? I am not sure...

On the second car I dont know if I should sell it asap to prevent from the major loss of equity. If I transfer to someone elses name and file bk a year later is that considered bk fraud? I just dont want to be put in a situation that could make things so much worse than they already are...

Also IF I sold the car with the equity and bought a car for $5000.00 would I be able to then spend alot of $$$ on it by fixing up the vehicle so that it would last for many years? Example.. new transmission, engine, ect....

Live in AZ, the vehicle exemption is $5000.00, what would really keep someone from buying a car at the exemption level and then spending alot of $$$ fixing it up so that it will last for many years?

I just am in a catch 22 here and want to avoid bk if at all possible however the $40K + in cc bills, a first and second mortgage on house that is loosing value day by day, I just think I am better off getting rid of everything and starting over...

Opinions please!!

[keepmine]

Live in AZ, the vehicle exemption is $5000.00, what would really keep someone from buying a car at the exemption level and then spending alot of $$$ fixing it up so that it will last for many years?


Because, very few people are stupid enough to buy a $5K car and then spend signficant dollars upgrading it. Far better uses for $$'s than sinking it into a depreciating asset.

Look at all the posts where you mention that car. That car is either going to get you into an unworkable Chapter13 or, get the filing dismissed for substantial abuse.
What's so hard about just selling the car, paying the lein holder and then, using the $20K that's left to cut your credit card debt in half?
Sometimes, bk just isn't the solution and this seems to be one of those situations. Just look at how much money you'll be saving on insurance, renewal fees, and maintence in addition to halving the cc debt load.

[mesa777]

Reg

Right, however look at all the money I will LOSE by having the court take my vehicle. I have to be able to drive so that I can work. Think its a CRIME in itself that the limitation for this state is only $5000.00.. $5,000.00 buys a junk yard wreck in this day and age.

Even if I sell the car, pay half on my credit card that I owe I would still then how to go out and buy a car, lease a car, ect. Cant even pay the bills I have now and the BK court expects that I can afford a new vehicle?

[keepmine]

You'll find that the $5K exemption that Az provides is extraordinarly generous compared to most states. You can absolutely buy reliable transportation for $5K to $7500. You also need to take into account the extra disposable income you'll have by paying down a chunk of that cc debt.

Start running some numbers. Sell the car and pay off the lein. Buy a used car in the $5-$7K range for cash. That'll be reasonably cheap to insure-I'd just have liability only. See how much you save just in the difference in insurance premiums. Take the balance and pay down a chunk of that cc debt. Say you pay down $15K worth of cc debt. The average mimum payment is about 2% of the principle balance. That'll free up another $300/month.
Turn your attention to your house. Get a realistic estimate of what you can sell it for. There are just a lot of ways out of this mess besides bk. You just have to start thinking about them.
You seem to just have some sort of bond thing going with a car you can't afford. Keeping that car will throw you into an expensive Chapter 13. Worse comes to worse, you sell the car and pay down some debt and you still have to file you should qualify for a Chapter 7. Or, use the proceeds to fund exempt assets like an IRA.
Look hard at Az. exemptions.

http://doney.net/ex-az.htm

You can put money in an IRA as long as you do it 120 days before you file.

[mesa777]

So if I understand this correctly... I can sell my second car, pay off the $5,000 lien that is currently on it and then transfer the rest of the funds into an IRA account without a federal investigation??? I will probably buy a new car, put some money down on it and try to protect whats left over.

$5000.00 is what it cost back in the 1950's to buy a car, hello folks its 2007-08!!!

I would LOVE to sell my home however I have in the range of around $213,000 to pay on it and the same houses are selling now for around $215,000.00, could not cover the closing costs, agent fees ect.. I put myself into this freefall due to gambling, its my fault 150%, am just very confused here as to which road to take here... I have a 800 credit score, all bills on time, just am at this point in a $62,000.00 hole here... The "free money" from real estate is gone and its hard to get a personal loan now... have tried to go that route as well...

I am sure that I am not the only person on here in the same situation.. overtended themselves... Just want to get this over in the next 6 months or so either way.... either file or hopefully get the banks to possibly do some sort of a re-pay program on the credit cards... Is this possible?? I am more than happy to pay all the money back that I have used however cannot afford the 25% interest on some of these cards that I have... The banks are lucky that I am willing to pay back what I have borrowed from them...

We will see what happens.. I have spoken to three different attorneys who keep telling me different things to do with my other vehicle.. The whole situation to me is very confusing and may be set up that way, I dont know just so that no one knows what to do..

Opinions please...

[mesa777]

Would a sale of a vehicle and transfer of funds into an IRA account 120 days prior be considered fraud here even if I purchased/leased another vehicle???