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Roger
Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31687
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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, my credit union approved me cash-out refinancing of

Customer Question

Customer: Hi
JA: Thanks. Can you give me any more details about your issue?
Customer: my credit union approved me for a cash-out refinancing of my current vehicle. I was advised to get a car that will last me for the long term before I file. Can I use the money I get from the cash-out refinance to purchase a used car and then when I file, surrender the other car that was refinanced?
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Customer: Ok
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Roger replied 1 year ago.

Hi - my name is ***** ***** I'll be glad to assist.

You're not likely going to be allowed to keep both cars....and if you pay cash for one car, you should review your bankruptcy exemptions to make sure it will be safe in Chapter 7 bankruptcy. Most states have a motor vehicle exemption that allows you to protect a certain amount of equity in your car. If you can’t fully exempt the value of your car, the trustee may try to take and sell it to pay your creditors.

But, it is sometimes easier to re-affirm a financed debt if you can prove that it wasn't a frivolous purchase, or a purchase intended to qualify you for bankruptcy.