Motor Vehicle Exemptions

[av2012]

I have a serious question!
Today was the 341 meeting and the trustee says we can only claim an exemption on two of our four cars. one they can take and were all for it but we need the other three. the thing of it is only one is in mine and my wife's name. the other three are in both me and my son, or both my daughter and my wife's name. since they are not just in mine or my wife's name can they be taken? he has instructed us to amend it with only two exemptions but can i claim one vehicle on the tool of trade and the other two under the general 2,500 state exemption?

[doni49]

I don't know the answer to your question. But I have a question for you and your response may have an effect on the eventual answer.

How long have they been titled this way? Assuming for the moment that they can't be taken if you only co-own them (and again, I honestly do not know the answer to that Q), if you changed the titles recently, it would be considered an illegal transfer.

[av2012]

The car has been in both names since August 6, 2008. So The question is can it be taken since its been in two names for so long?

[SMinGA]

If the trustee says you can only exempt 2, then here is a basic way it should work:

Veh 1 list equity, claim exemption
Veh 2 list equity, claim exemption
Veh 3 & 4 list equity, no exemption **

If jointly titled with yourself & someone else, only 1/2 the equity is yours. You may need to show titles to atty/trustee & indicate on the petition 'co-owner along with xxxx'. Your own equity is what is not exempt. Ultimately you can probably work it out to pay the trustee the value of that equity.

If the trustee takes the car & sells it, 1/2 the proceeds must be paid to the co-owners. Not likely to be worth the trouble. Discuss w/ your atty of course, but perhaps start with a low end offer?

[shell]

I am in the process of filing bankruptcy and I bought a car earlier this year, using money from my pension since my credit is shot. Now my lawyer is saying since the car is a 2010, this my be view as an asset and they may take my car. Any advise?

[cantbreathe]

These are great questions?

Oh Boy! Here I go with my own question on the topic of vehicle exemptions. I hope this is the right place to put this....sorry in advance if it's not...Filing Ch 7 , joint/Wa State , My hubby and I have 2 cars. Using Kelly BB they are worth about what we owe on them. One, about $3,700 the other $2,300 (No equity to speak of) but they are decent vehicles and we will reaffirm to keep them (even though atty says CU may never release their titles to us once they are paid off).... My husband , late last year, got a motorcycle given to him by an ailing relative. It is titled, avg retail value is about 2,400. What could happen here? Do you mean the Trustee could take hubby's bike? Oh My! That would not be pretty!

[needtofilebk]

Need to buy a new car prior to filing- and need to keep it post filing!

I am currently delaying the inevitable bk because I can't afford my current rent and need to find cheaper housing before I ruin my credit with Ch7. CC's are maxed at a combined 40k + another 28k for my wife. We were planning to file (in MA) as soon as we sign a new lease, however, we were just rearended and our one and only car has been deemed totaled. We need to purchase a new car urgently and are wondering what the ramifications are to putting 2k down (which is what the insurance has given back to us) on the purchase of a 10k car. Is this new debt (if I can even get the loan) forgiven post BK, if so, when, and if not, can I pay the loan monthly as anyone else would and keep the car without a lien or fear of repo? I've never had a late payment on an auto in my life and credit is currently in the 700's. Thoughts? Thanks in advance.

[SMinGA]

Each state has a vehicle exemption, stating how much equity in a vehicle you can protect. Some states also have a wild card exemption, which you can use for a car or anything else.

If the car is worth less than or equal to what you owe, there is not equity. Nothing to protect, you just need to keep payments current and some lenders may require a reaffirmation.

If the car is worth more than you owe, you have equity. If it is worth alot more - depends on where you live if it will be an issue. The valuation itself depends on the district. Your atty should know what value your district/trustee uses. KBB retail, KBB trade-in, NADA retail, etc.

For the situation of paying $2000 cash down and financing the rest: probably not an issue. You won't have $2000 equity after the purchase as part of the financed amount is taxes, fees.

For the situation of owning the 2010 vehicle outright, this is likely a problem. Unless you have a large wildcard exemption possible, you could easily lose the car in the BK. If so, the trustee would sell it - and have to pay you your exemption value.

Research your state's exemptions & wild cards, and discuss w/ an attorney.