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Chapter 7 question regarding a car

Discussion in 'Ask the Attorneys?' started by I'mSickOfThis, Oct 8, 2013.

  1. I'mSickOfThis

    I'mSickOfThis LoanSafe Member

    We filed for chapter 13 almost three years ago. Last year my husband lost his job and has since gotten another one, but at alot less pay. We are struggling to make our trustee payments. I called my lawyer and she said we can try to switch to a chapter 7. If not, we can attempt to lower our 13 payments. My question concerns my car. I have an old corvette with 85K miles on it, but it's worth about 18K. If I file for chapter 7 the trustee will undoubtedly take it. If I trade it in and lease a cheaper car, and then reaffirm the lease, is that breaking the law or doing something unethical? Is there anything wrong with doing this? I need a car to get to my job and short of leasing another car I can't imagine how I'll be able to do this. Thank you for your advice.
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Hello I'mSickofThis,

    How much is still owed on the Corvette, or has it been paid off? I'm not an attorney, but from my understanding if the car is paid off, the Trustee may be able to sell the car to pay off the unsecured creditors since it's valued much more than the exemption amount ($1,000 in Florida). In certain cases you may be able to pay extra to the Trustee to protect your car in a Chap 7, but it will likely be a significant amount and not feasible for most borrowers. IMO it would be in your best interest to attempt to negotiate a lower payment for your current Chapter 13 until the repayment period is over.
  3. I'mSickOfThis

    I'mSickOfThis LoanSafe Member

    Thanks for the advice. I think my attorney is leaning that way too.

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