Buying an RV as a permanent residence in California during an active Chapter 13 BK?
I am currently in a Chapter 13 plan (since 4/05). I live in CA and have been a homeowner from 1998 till right before filing my Chapter 13 due to an expensive & litigious Divorce. Unfortunately, I am unable to afford a home based on real estate prices in California. I have restablished credit (below the $1000 threshold allowed) & my credit score is 600 which I’ve been told is very good for an active BK. In regards to taxes, I can no longer claim my kids and I’ve lost the homeowner’s deduction, I would like to purchase an RV as a permanent residence. I have checked with an attorney and a tax advisor who both advise this is a smart move based on my income and tax bracket. The attorney advises that the Chapter 13 Trustee will, most likely, approve this purchase. My challenge is finding a lender that will lend me the money for the purchase that reports interest paid to the IRS. I am looking at a $35000 purchase including tax and fees. I have access to 401k funds for a 30% downpayment on a collateralized loan on a used RV. According to my tax advisor, interest paid on a primary residence (yes, even an RV) has no real limit, so I would be willing to pay up to 25% APR based on my finances and credit history. Any suggestions on lenders, alternative means of financing or am I just plain crazy…
In addition I have a free place to park. Includes all utilities free. Does anyone know any ‘alternative’ finance companies that report interest to the IRS? APR does not matter up to 25%. Based on my income and tax bracket this the best situation for me.
Sorry you’re going through this issue. Your question caught my attention because I actually lived in an RV while going to college and living in South Orange County.
There are two ways of going about this. First, the way I tried was horrible and failed miserably. And that is to just live on the streets, move the RV from time to time and fill up on water and drain when you can. The major problem is of course, you become a number one target for the Police and people hate you. It’s a very sick unsecure feeling to not have any place to ‘call your own’ and constantly feel like a criminal. (almost)
Second is to have or rent a place to park the thing permanantly. This would be a good option in my opinion. The only issue is one again cost. Renting a place in a RV park or even a mobile home park is extremly expensive, especially considering you don’t get much and your neighborhood is about as bad as it gets.
Do you know anyone you would allow you park your RV at their house or business? If you do then you’re really in luck and would probably work out great.
As far as the financing, are you bringing home a big salary? An APR of 15% plus is REALLY terrible. You’d need a pretty fat salary to have those kinds of tax writeoffs to even start to look tolerable.
If you have a place to park for cheap or free, go for it. If not, get yourself a cheap apartment and you’d feel way more comfortable and stable as an individual, and I’d bet you’d be a lot happier.