Chapter 7 Bankruptcy question. About vehicles...

[TimidOCer]

OK my mom owes alot of credit card debt and is thinking of filing chapter 7 . Anyway she talked to an attorney today and he said that you get to keep 1 vehicle , which has to be fair market value of under 2000. Now she has a toyota pickup thats been paid off for years its a 92 and she doesnt want to have to sell that and get a $2000 junker, I was curious if I could buy it for like $500 and sell it back later? She didnt quite know about that part. What the attorney said is she would sell the pickup and get a $2000 car and the rest of the money would go in an IRA . But my mom really doesnt want to do that and I was wondering if there are any alternatives.


Thanks!

 

[PsychoAndy]

Isnt chapter 7 complete liquidation of all assets to satisfy creditors?

Bankruptcy law is unique to every state, so the answers you recieve here may not apply.

-PAB

 

[Cyberian]

I don't see how the law would allow that.
What would prevent someone from doing the same thing with a $350,000 Bentley?

 

[PsychoAndy]

Originally posted by: Cyberian
I don't see how the law would allow that.
What would prevent someone from doing the same thing with a $350,000 Bentley?

Exactly. The state of FL has a really large loophole in bankruptcy law.

You can keep your home. Primary residence, must be lived in for 2 years IIRC. No cap on value.

Basically: If you're going broke, buy a $10m house. Many people that were formerly rich flock to FL, buy mansions and then seek chapter 11 protection.

-PAB