Chapter 7 Bankruptcy - Can I sell my car and pay my IRS tax bill?

Question

I will be filing for Chapter 7 in Oregon, and I have $15,000 in IRS income tax debt. I know the tax debt will not be discharged, but I was wondering what would happen if I sold my car to pay on this debt before filing? The auto exemption in Oregon is $2,150; my car is worth $11,000. If I file for Chapter 7 and the trustee sells my car, I will get $2,150, but what will happen with the proceeds? Would they all go to the IRS anyway, or be split among my credid cards as well?

I'd prefer to keep the car, but I don't think that's an option with such a small exemption. It's in pretty rough shape (broken windshield, rust, body damage, needs tires), but Kelley BB still lists at $11,500 for "fair" condition. It's maybe more like "poor" condition but Kelley doesn't value poor condition. What are the odds the trustee won't take it? 2000 Dodge Ram 2500 Cummins diesel 4x4. I don't have any other exempt property of any value to substitute, and Oregon doesn not have wildcard exemptions.

Answer 1

Sorry you are in such a predicament. I feel for you. I wish you never had to file. I wish your family could help you. I wish I could help you, but my hands are tied behind my back. I think you should sell your car and try to get or borrow money from friends or family to get yourself from filing Ch 7. That will follow you for life. Good luck.

Answer 2

Hi,

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Answer 3

Get a hold of a tax resolution specialist. You wont get much out of it if the trustee takes your car. They will use most of the proceeds to pay off the bills. It doesnt sount like that vehicle is worth much. The figures that the bankruptcy court uses are "yard sale" figure and are for pennies on the dollar.