Will I get in trouble

Posted on Tuesday, September 19, 2006

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I have not yet declared personal bankruptcy but, I probably will be soon.

I have a pick up truck that I owe 4 payments on approx. $2400. I spoke to GMAC regarding the payments and that I was considering bankruptcy, and should I return the vehicle to them since I can only have a vehicle worth $5,000.

I have been told the balck book value on the vehicle is roughly $11,000. It was suggested that I sell the vehicle privately and pay GMAC then buy a vehicle that would fall in the $5000 exemption. What will happen to the proceeds of the sale or will I be in trouble for doing this?

Filed under: Bankruptcy
 posted by Questions @ 2:33 pm
1 Expert Comment:

 At September 21, 2006 | 3:11 pm , Barton Goth, GCO Inc. Bankruptcy Trustees Said...

You could sell the vehicle privately or alternatively, use the proceeds to pay out the loan and purchase a vehicle worth less than the $5000 exemption. The key is that any money left over must be turned over to your trustee when you file a bankruptcy, failure to do so could result in significant problems when it comes to discharge time. Alternatively, leave things as status quo, on your bankruptcy documents you will list equity of $8,600. Of this $5,000 is considered exempt so to keep the vehicle you will have to make payments on the non-exempt portion of the vehicle ($8,600 less $5,000 or $3600). For a more detailed explanation of the pros and cons feel free to contact my office.

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