How do I protect my Minor Daughters Car?

[Ron4279]

My daughter bought a car when she turned 16..Because she is a minor the car had to be titled in my wifes name. the money came out of her savings account
to pay for the car. North Carolina allows a $3500 exemption on automobiles.
Between my car and my wifes our total exemption of $7000 is used up. So the question is how can I protect my daughters car without sacrificing the 2 other cars in the house. She turns 18 in 2 weeks. Will the trustee allow us to protect this car if we can show that she paid for it. Worse case scenario is that we protect her car and let one of the other cars go. Any advice would help.
We have not filed yet.

[backtoschool]

If the car is titled in your and your wife's name, it cannot be transferred or protected apart from the regular $7000 of exemptions unless you also have a wild card exemption you can use it on.

Trustees will not honor transfers of property to family members going back two years from filing. The trustee would go after the car unless you exempt it.

[albacore44]

My daughter bought a car when she turned 16..Because she is a minor the car had to be titled in my wifes name. the money came out of her savings account
to pay for the car. North Carolina allows a $3500 exemption on automobiles.
Between my car and my wifes our total exemption of $7000 is used up. So the question is how can I protect my daughters car without sacrificing the 2 other cars in the house. She turns 18 in 2 weeks. Will the trustee allow us to protect this car if we can show that she paid for it. Worse case scenario is that we protect her car and let one of the other cars go. Any advice would help.
We have not filed yet.

Well its not necessarily used up. You shoul seek advice of an attourney and see how you district places a value on a vehicle. I have 3 cars but 2 are financed and worth less than the loan so there is no value. so therefore the one I own outright will fit into the Ca auto exemption.

you could also take a loan against one of them, encumbering it, and use the cash to pay for your BK.

[backtoschool]

Well its not necessarily used up. You shoul seek advice of an attourney and see how you district places a value on a vehicle. I have 3 cars but 2 are financed and worth less than the loan so there is no value. so therefore the one I own outright will fit into the Ca auto exemption.

you could also take a loan against one of them, encumbering it, and use the cash to pay for your BK.

I agree about taking the loan against one of the cars and encumbering it. But make sure you spend the money gradually on legitimate household expenses and do NOT get the loan from a family member.

[Ron4279]

I agree about taking the loan against one of the cars and encumbering it. But make sure you spend the money gradually on legitimate household expenses and do NOT get the loan from a family member.

I guess I'm too green at this. But who is going to loan me money on a car if I'm about to file bankruptcy?

[backtoschool]

I guess I'm too green at this. But who is going to loan me money on a car if I'm about to file bankruptcy?

Some people file bankruptcy before their credit score is completely trashed and they can still get loans. I was in this position. I traded in a car I had 15k of equity in for a new car and had a 10k loan after the trade in. Since the car depreciated as soon as I left the lot, I was able to cover the financed car in exemptions and also have a new car.

If you cannot get financing for a trade in, or use the car as collateral against a secured loan (in order to remove the equity) then it is exposed to the trustee unless you exempt it.

[albacore44]

You have to plan your BK. I knew last Oct. i was in deep doo doo, so the attorney i consulted advised me to buy a car before my credit was trashed, also it would give me extra expenses to keep from being pushed into a Ch-13. I'm filing in January.

[backtoschool]

You could try 722 redemption and perhaps trade the car in for a new car. They will finance at 22 to 24% but that is going to add a car payment to your expenses.

[whipster1]

If your attorney is smart or willing he could argue that the car is legally titled in the wife's name but the beneficial title is really the daughter's since she is the one that paid for it. You would need to prove the payment by the daughter to try this. Good luck.

[dspii]

My daughter bought a car when she turned 16..Because she is a minor the car had to be titled in my wifes name. the money came out of her savings account
to pay for the car. North Carolina allows a $3500 exemption on automobiles.
Between my car and my wifes our total exemption of $7000 is used up. So the question is how can I protect my daughters car without sacrificing the 2 other cars in the house. She turns 18 in 2 weeks. Will the trustee allow us to protect this car if we can show that she paid for it. Worse case scenario is that we protect her car and let one of the other cars go. Any advice would help.
We have not filed yet.

I have the same issue here in Ohio. My daughter bought her car with her own money and put it in my name since she was 17. My lawyer had me transfer to her before I filed and clearly noted the transfer in my BK schedules. He told me if we can prove she purchased with her assets (money) we should be OK (I have cancelled check). Gather your proof that she purchased and review with your lawyer. Remember, the law was written to liquidate "your" assets for the relief of your creditors...there are some exceptions and this is one of them, if it wasn't a gift to you and she is the priciple operator, you should be OK. My 341 is in 8 days....so let's hope he is right or I will revise my schedules to protect her car.

[2Bshinyandnew]

If your attorney is smart or willing he could argue that the car is legally titled in the wife's name but the beneficial title is really the daughter's since she is the one that paid for it. You would need to prove the payment by the daughter to try this. Good luck.

True. Also, it depends on the customs in the filers district. The OP's exact scenario has been argued extensively in my district without success for the filer.
However, the outcome it may vary from district to district. An attorney consult, or 3 would be helpful to know what flies in your district and what doesn't.

I was also in the same situation as the OP. I had 2 attorneys say they wouldn't even bother to try and exempt my minor daughter's car that was in my name. The third said he thought he could make an argument to exempt it and had a good chance at succeeding, but it would cost me an extra $2K in legal fees with no guarantee of the outcome.

[NoMoreCards]

I had co-signed for my daughters car lease. I reaffirmed her debt, but had to file a notorized statement that said my daughter made the car payments. My attorney said that I may have to appear in court and prove this.

So far, that has not happened but if/when it does I will simply take her bank statements to prove this. So be prepared to prove that your daughter did actually pay for her car. My attorney said if we could, it shouldn't be a problem if asked. (I hope it does not get that far)

[albacore44]

When going through my planning, i noticed that my sons truck, that he purchased about 3 years ago, and we loand him a thousand or so in addition to his cash, was titled in all 3 of our names. He has long paid us back, so I had our names removed from the title in June, so only his name remains. i'm going to inform the attourney, i dont consider it a real transfer, but we will see what he says. It's only worth a couple thousand anyway.