Paying off car a few months before filing bankruptcy?

[Anonymous]

Hello, I have a ton of credit card and medical debt. At least 40k...my husband and I have 2 vehicles (we also live in Texas...not sure if that info matters) we currently have one paid off motorcycle, not worth much, and two vehicles we are still paying on. My husband would like to pay off his truck with our tax return so we can put that payment towards repaying our mortgage company for the amount we are behind on. We would also like to file Chapter 7 before the end of the year. Is it bad to pay off his truck months before hand? 

[Anonymous]

Well, there's only so much you can exempt. 

You need to talk to an attorney about the laws in your state and have them do proper planning, or else you might pay off both of your cars just to find that the Trustee sells one off to pay your creditors.

Property laws and bankruptcy exemptions are complicated.

Edit: I looked at the Texas exemptions, and they're much better about vehicles than most states. It just says one vehicle per adult family member that drives a car. Wow!

Trustee shouldn't give you too much grief about it. It is essential for both of you to get to work, right? How much, round about, are we talking to pay this off? 

The intent of the bankruptcy law isn't to leave you with nothing and no way to re-emerge and support the household.

[Shooting-For-800]

The more equity you have, the more chance of losing it in BK7.

Each state has its own BK laws.  

Invistigate what your state considers exempt.

Are you both filing or just you? 

If just you, they can't take his stuff.

Also, check for "Tenancy by the Entirety" laws in your state if you are filing alone.

GL!

[rmduhon]

In Texas you can exempt 1 vehicle for each person who holds a license or someone who relies on someone to drive them. For example my husband and I just filed bankruptcy and could have exempted up to 3 vehicles because my mom lives with us and doesn't drive. We only have 1 though so it wasn't an issue for us.