Buying A Car Before Chapter 7 Discharge

[Anonymous]

So I traded my paid off car in for another car that I paid the difference for in cash, the Trustee already filed a report of no distribution so does anyone think this will be an issue?

[Anonymous]

I drive a 2002 Acura and my Attorney advised me to buy a car before I filed because of the cheaper APRs. Cars do not last forever. He said the courts are generally understanding, if you are buying something modest and it is your primary mode of transportation.

The only thing that I can think of is the cap on exemptions. Do you know what the total amount of exemptions that are allowed in your state? If the value of your car and other exemptions are less, it should not be a problem. They may want to know where the money came from to make sure you were not hiding it at the time of filing.

Lastly, I'm not a lawyer. YMMV. Nolo.Com has a lot of good information

[Anonymous]

I put $1,000 cash on top of the trade for my old car and didn’t get any financing.
The money came from a combination of wages I had been paid and left over cash from my tax return that the trustee didn’t take.
The value of the vehicle is roughly the same but the paralegal said I have thousands in leftover exemptions should anything else come up.

I went from a 2014 Civic to a 2008 Pilot. I told the dealer I was in a bankruptcy and couldn’t finance so they tried to get as close to a straight trade as possible. The Civic was paid off as well. That’s why I think it’s not a huge issue because it’s not like I bought a BMW or anything, and it’s my only vehicle.

[Anonymous]

They used KBB trade in for the Civic and WA is one of the very few states that allows federal OR state exemptions so I had to use the federal wildcard exemption to exempt my car. And I’m married so it doubles.
The trade in value of the car I just got is actually lower than the Civic but the actual retail value is pretty close to the same.

[Anonymous]

Sounds like you are in a really good spot then. Congrats on the newer car.