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So my girlfriend (who lives with me) has been saving money to file bankruptcy as she owns over 30K in medical bills. Recently we came to the decision to become a one car household since i work from home and hardly ever use my Subaru. We will save over $400 a month by doing this when you add up her car payment, car insurance, yearly registration fee, and so on. Currently she is upside down on the car loan so rolling it into the bankruptcy shes yet to fully pay for makes sense to us. Just for the record, she's paid the lawyer some but not all of the bankruptcy fee.
Now im very aware of what some people are doing to there homes before the bank kicks them out these days. Gutting them and selling every part they can get money for and i got to thinking, why not do it with her car so she can pay off a few hundred in back taxes she also owes before we tell the bank to come take her car?
I ask this question only to be aware of any legal ramifications from doing this,.. are there any? She can't sell the car if she's upside down and doesn't have the difference, but can the act of parting the car out be done legally while she's still in good standing with the bank?
Now I know this would be considered quite the unmoral act by some but for the sake of this discussion let's not go there. To each their own when it comes to morals in my opinion. We could fix everything wrong with the car mechanically, have it detailed, and put that fresh new car smell back in it before handing the keys to the bank and they would still sue her for the amount she's upside down on the loan, so whats does it really matter since this will all get put into her bankruptcy anyway?
She can't sell the car if she's upside down and doesn't have the difference, but can the act of parting the car out be done legally while she's still in good standing with the bank?
No, she can't legally part out a car that she does not own.
If she's being represented by an attorney she should be getting her legal advice from him or her, not from strangers on this board.
I assume this will be a no asset bankruptcy, but she is in danger of having the secured creditor, or even the unsecureds, trying to set aside what would probably be considered preferential transfers.
In addition, selling personal property that someone else has a security interest in is a crime, probably conversion or larceny.
No, she can't legally part out a car that she does not own.
...well then how can anyone legally part out a home they do not own? If you haven't noticed this is happening all over the country right now. How is a car any different legally or loan wise?
If she's being represented by an attorney she should be getting her legal advice from him or her, not from strangers on this board.
Obviously no attorney is going to say ok to this so why even suggest that.
Quote:
Originally Posted by jackmccullough
I assume this will be a no asset bankruptcy, but she is in danger of having the secured creditor, or even the unsecureds, trying to set aside what would probably be considered preferential transfers.
I'm not sure what any of that means. It's just a normal chapter 7 bankruptcy.
Quote:
Originally Posted by jackmccullough
In addition, selling personal property that someone else has a security interest in is a crime, probably conversion or larceny.
"...well then how can anyone legally part out a home they do not own? If you haven't noticed this is happening all over the country right now. How is a car any different legally or loan wise?"
PS:
Thanks to everyone who took the time to reply thus far, i don't want it to sound like im arguing with you opinions, im just trying to wrap my head around how this is any different from gutting a home you down own of its appliances just before you get kicked out by the bank and file bankruptcy.
PS:
Thanks to everyone who took the time to reply thus far, i don't want it to sound like im arguing with you opinions, im just trying to wrap my head around how this is any different from gutting a home you down own of its appliances just before you get kicked out by the bank and file bankruptcy.
Yes you are arguing. The fact that you know what the lawyer's answer would be tell us that you know what the law is (even though you claim that you don't know any legal ramifications). It's illegal to do anything to the property that would become property of the estate. What does that mean? Her chapter 7 filing may be deny. Now you are stuck with a car that isn't even drivable.
You mentioned that others are parting their home and leave their home empty...Do what you see others do and hope that you don't have to explain your reasons when your plan backfire. I don't think you are going to get someone on CD telling you that it's OK to do it.
You two are not married. Her finance isn't your business so let her take care of this with her lawyer unless you want to get involve financially. That would be my only opinion for you.
Again, my question is: what exactly is the difference between gutting a home and gutting a car from a legal standpoint? Why would a bank or the law treat you any differently for selling a few parts out of an automobile they gave you alone for, versus a home they gave you a loan for that you sold the appliances out of?
It's simple. Appliances are not usually considered part of the home and are rarely secured by the mortgage. An engine is most certainly considered part of the car and would be illegal for you to part out if there was a debt owed on that automobile.
Think of it like this: your house does not lose its function when the fridge or stove are removed but your car loses its function with the engine or other vital parts removed. Try pulling all of the windows out of your house and selling them, then see what the bankruptcy judge has to say. You will not be pleased with the results.
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