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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My wife and I are preparing to file Bankruptcy Chapter 7 in

Customer Question

My wife and I are preparing to file Bankruptcy Chapter 7 in Florida due to the fact that I am perminantely Disabled and have no chance of recovering enough to ever work again. I have been fighting with my disabiklity for over a decade and have worked - stopped- worked - stopped and at one time I was quite successful and made over $400,000 own rental property, etc now everything is all gone. We havent bought anything of value dont have anything of value - which i swhat this question is all about.

The Last new things we bought were in 2006 when we bough our house and our 6 yr old was a infant, now we just had another daughter on 03/24/2012 I can make it with the garnishment they have on my wife, I have been robbing peter to pay paul for months since it happened. I lost my ability to do any kind of work - or to even try in 2007 when I was struck at a red light by a 18 yr old doing 60. I had a private disability policy in place, and collect SSDI totalling about $7000 per month, our mortgage is $4000 a month and we are currently in the arrears on our 2nd for aqbout 18 months ($20,000) and are trying to work something out with the bank. We havent been late on a 1st mortgage payment ($3000) in quite a while, have teemendous medical expenses, etc. Because of my disabil8ity which was approved by SSDI in 2005 I had tried many time to go back to work, but the accident in 2007 has called for another surgery and I have remained hopeful until recently of returning back to work - there is a big difference between $400,000 and $70,000 as you can imagine, my private disability isnt taxable. We had our 2nd house foreclosed on in 2009, will wind up filing probably over $300,000 in assorted debts, etc. We have 2 car the 1st is a 2003 cadillac that we are paying 29% on and have a $2000 balance this car has about 148,300 miles on it. Our second car is a 2006 GMC YUKON DENALI XL which I purchased new in 2006, it had 104,206 last time I looked as the odometer is broken as well as it needing some body work (approx $2300) and now has tranmission trouble.

NADA, KELLYS BLUE BOOK, all the guides take the value - wholesale or retail and deduct 40% - 60% on the the value of $14,000 which is 'rough' trade in for the odometer not working, never mind the body work and the transmission that just started to slip. The truck is what it is, and I read that you have a $1000 per vehicle equity protection per car - obviously on the 2006 GMC Yukon Denali Xl I am over that even if you cut the value in half, as we owe just over $3400 on it and are coming to the end of the loan. If I deduct the transmission and the body as a dealer told me they would have to do if I traded it for a another 29% loan I would get about $3-$4,00 more then the payoff after the work is complete, I was verbally quoted $2300 bfor the body work, and another $4000 for the tranmission.

Obviously the cadillac is unreliable and the GMC was the reliable car unti recently - is there anyway to save this truck or is it going to bhe taken ? When the filing starts, the payments are $674 per month and the balance will be gone within several months - is there anything I can do here?

If you added up everything we own you would be hard press to come up with $8000 in personal property, as I mentioned e havent purchased anything new since 2006, not furniture or electronics, nothing. Our mney goes to surviving and paying the daycare and now the additional cost of daycar to take care of of our newborn as I cannot when my wife return back to work in June, and that is $400 per week for both children (the 6 yr is in kindergarden so she goes to day care after kindergarden) I know Bankruptcy is Banlruptcy, the only thing of value I have is a $57,000 note from a 2nd mortgage I took back on a property I sold in 2004/2005 at a 9% rate that was never paid, it is 'uncollectable' as I have tried VERY hard to collect this note, and I am sure that I will be required to turn that over to the trustee as well - which I understand and have no problems doing so, my main question is the truck, its the only realiable sourceof transportation we have - I know they dont care about that and that I ned to get to medical appointments, my wife needs to get to work, etc. Is there anything ANYTHING that I cna do to protect this 'asset' (if you want to call it that) .

Thank You
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
1) Do you own a home?
2) If so, how much equity does the home have?
3) What is the current market value of the vehicle you are asking about?
4) What is the balance on the car loan for the vehicle you are asking about?
Customer: replied 5 years ago.

We own a home

We have NEGATIVE EQUITY of over $150,000

The current Market Value of the (Wholesale - poor condition) vehicle of the the 2006 GMC is $14,342 (That doesnt take into account what the dealership(s) have told me about deducting $2000 for the body work that needs to be done, and deducting 40-60% (one dealership deducted 50%, one deducted 60% from TRADE IN VALUE, both said that whatever number is used to detrmine the 'value' of the vehicle it will have to be adjusted just like a 'recovered theft title, or anything else where the mileage has no way of being verified and cannot be sold with verified mileage, it has to be sold as is, mileage unknow or 'T.M.U' and the next title issued the will read 999,999 in the mileage space, or it will say tru mileage unknown since the odometer is broken.


That was BEFORE the transmission started acting up, with the quotes I recieved to fix the transmission (almost $4000) I have no idea what that does to the value, I imagine it is like everything else - deducted from the vehicle.


My dilemina is we HAVE NOT filed and have not started the paperwork, I need to fix the transmission or the car is useless. I dont have $4000 to fix it, I can borrow the $4000 from a friend, but to just have it taken away at Bankruptcy seems silly to borrow that much money then owe that much money - I would never put my sister in my bankrupty filing, I have held out for 4 years with hopes of being able to return to work but my conditions are getting worse and require futhur surgery but since I am never going to return to work I have no choice - when they wage garnished my wife at 25% (a $1000 a month) that nearly killed us and my mother has been filling in the gaps for us so I need to do this now. I would have done it while my wife was pregnant, but she had so many medical complications I didnt feel she could take the stress without something happening to her and/or the baby. I know it seem as if our combined income is outrageous, but we spend over $500 in medication for me alone, $400 a week (with the baby including ) in day care - I cant care for the baby, especially with the medication and its effects nevermind my disability, and our 'other' bills.


So the truck is suppose to be worht $14,000 - we owe $3800 on it at $674 per month, if I adjust it the way the dealerships have it is worth far less. (-$7000 for unknown miles, then -$2000 for body damage so the value sinks way down to $7000 - $9000 and that doesnt include the now broken transmission and I dont know what the deduction is for that, if it folllows the 'steps' that have been taken so far, it is whatever the cost of the repair is and that is deducted from the value - as the dealerships explained to me about the body work, so it's a unknown deduction for transmission). But do the courts/trustee/judges deduct and see things like this as they are in the real world? If I can protect my asset (I guess on paper I exceed the $1000 equity that is allowed on a car - only on the truck and not on the Cadillac, and I know I dont have $8000 in personal property unless you count every stitch of furniture in the house including the baby furniture - all which was purchased before the 2007 accident, and with that at full replacememnt cost I may make it to $8000 but at depreciated cost it's half of that - maybe $4000. The only jewelry we have is our wedding bands, and as I mentioned we havent purchased anything new in 5 years.


So my quandry is whether or not to borrow the money to fix the tranmission, as I dont want to gamble with my sisters money, and there is no way we would ever qualify for a 13, or to do a 13 filing and to switch it to a 7.


I know I provided you more information then you asked, but I felt that knowing the reason(s) why I was asking the question might be important, not that I am trying to 'skirt the system' or am a 'con man' I just dont know what to do and dont want to gamble with her money.


Please feel free to ask anything else - this is why I mark the question as 'high detail' because it is seemingly (to me anyways) complex.


Thank You



Expert:  cfortunato replied 5 years ago.

If your vehicle cannot be sold for at least $5,000, you would be able to keep it if you file a Bankruptcy. If both of you are filing, if this is your only vehicle, and if the vehicle was acquired during your marriage, you will be able to double the exemption, so that you can keep the car if it cannot be sold for at least $10,000.


I think this is what you wanted to know. If not, please let me know.
Thank you.

Customer: replied 5 years ago.

Sorry it took me so long to get back to you - been a very difficult weekend - anyways, I just need some clarity on a couple things.


In Florida, I know that Joint filing Bankruptcy Chapter 7 has $8,000 in personal property exemptions, and (if applicable of course) another $1000 per vehicle in 'vehilce equity'. Since we have 2 vehicle, one I am not worring about the equity because there isnt any (a 2003 Cadillac Deville with 149,890 miles on it and a $2300 not attached)


When you stated that "if it can't be sold for over $10,000' then we can keep it. With the circumstances I stated above, the 2006 GMC Yukon Denali being TMU as the odometer broke and is not working and reads 104,000 + on it, over $2000 in body work needed, and the tranmission is started to give (which is really my sticking point as I dont want to borrow the monet from my sister to have it fixed only to loose it in Bankruptcy - as I would not 'dismiss' her).


In everything I have read - and I am NOT by any means a lawyer I have NEVER seen anything about if a vehicle cannot be sold for over $10,000 dollars you can keep it in any text or books, could you please provide the Florida State statue on that were I might be able to find it, or it is a Federal Status, if so, could you please provide that statue for me?


If I borrow the money from my sister, and since we only owe (well I owe, the truck is financed in my name alone but I purchased it when we were married so i am under the assumption that it is a joint 'asset - like our home, I am not on the finance, I am on the deed, I do not think my wife is on the title - but I understand what your saying. Since we owe about $3000 on the truck and are goign to borrow ANOTHER $4000 from her, we already owe her money, can she take a 2nd chattel position on the title to insure her money, or is this even needed?


Who determines the VALUE of the vehilce, the trustee, etc and how does he do it? Is it ultimately done by a dealership, do they try and sell it first, how is a value determine in a case like this where the odometer being broken devalues the vehicle by at least 1/2 - in the case (depending on the delaer I spoke to) between $7000 -$10000 ??? As they say 'we cannot verify the mileage on it, we can only go by what it say on the odometer, it could have 150,000 on it, so they chop a $15000.00 (before the transmission and body work are deducted) to $7500.00. What is the best way I can protect my sister and her loaning me the money - ulitmately if everything went south I would still pay her, but wouldnt putting a 2nd lien on the truck help insure that position or does that look like a 'trick' or 'con job' that we would be trying to pull, I am sure that people do all sorts of dishonest things and I can't imagine that they are going to view me and my wife any differently.


Is there a better way of protecting her money she is loaning us to fix the transmission on the truck?


Thank You and I do sincerely apologize for the delay in getting back to you with your reply.



Expert:  cfortunato replied 5 years ago.

There is no statute that says if your vehicle cannot be sold for $10,000 then you can keep it. That statement was based on the fact that you and your wife have a combined personal property exemption of $8,000 plus a combined $2,000 motor vehicle exemption - both of which can be applied to your car. Applying an exemption to property means the property is protected up to the amount of the exemption.

The value of a car is the amount the car can be sold for, which is the KBB private sale value of the car.

The best way to protect your sister is to continue to pay her - which you are allowed to do - in spite of your Bankruptcy.

Customer: replied 5 years ago.
What happens in this whole thing if I file chapter 7 and my wife files 13?
Expert:  cfortunato replied 5 years ago.

Please "accept" the answer(s) to your prior question before proceeding with a new question.

Thank you.