Transferring car title before bankruptcy

[Leesa0926]

So my husband and I are filing and both cars are in my name. The lawyer said we each have an exemption for the car and because he drives one and I the other it's reasonable to transfer it. If the trustee does not agree we may need to give up the car/exemption which I am ok with if it's a must.

I just want to make sure other than contesting it there are no other ramifications.

She did say transferring to anyone else would not be allowed but since we are both filing together she can explain to the trustee

Anyone have a similar experience?

[justbroke]

Absolutely don't transfer the vehicle before filing. That will cause all sorts of issues. Your attorney seems to think that they can deal with the issue of the vehicle being in the same name. I'm assuming that you own both cars outright with no loans and you have significant equity. If you have no equity, it's a non-issue.

[Leesa0926]

We owe 2000 on one of the vehicles.

The issue is the exemption only allows for one exemption per person. If the title is are split we each get the exemption and can keep both cars. If not we will most likely loose the paid off one.

She said normally you do not transfer but in this case she thinks she can deal with the trustee on the issue since we are both filing together. She said she can't be sure if the trustee would accept that or not.

I get that and worse case we are on the car. Just worried if there is anything else to be concerned about.

[Leesa0926]

By deal I mean she is saying normally she states do not transfer but she thinks we should in this instance. Worst case she takes it up with the trustee.

[justbroke]

The exemption allows the debtor to apply the exemption to a single vehicle.

If you transfer, it will make it worse or even easier for the trustee. Your attorney will likely argue that while you have bare legal title to both vehicles, you have equitable title in only one of the vehicles. It will be up to the trustee to argue as to whether you own both vehicles for purposes of the exemption.

I guess the attorney is going to exempt the one you fully own (paid off), and hopefully that is < $5,000 in value. Then just attempt to exempt the other one using the other spouse's vehicle exemption and hope the Trustee doesn't care or there's a reasonable argument on equitable ownership.