Relative to take out loan for me to get car -- will this be a problem?

[sillywalks]

I own 2 cars, one which my son drives. Both have 185K+ miles. I am thinking about getting a low mileage/new car but my credit sucks. A relative is willing to get a loan in their name for me to buy a car. I would pay the insurance, maintenance, tags, etc. Would this cause any problems in Chapter 7?

As an aside, would there be a problem with me having my name on the title, if the loan is in my relative's name?

Thanks! (Sorry if this double posted -- my first post is missing?)

[keepinitreal]

It's not a "problem" if you drive a car that someone else has as collateral for their loan.

As far as your name being on the title, I would think the lender would need the borrower's name on the title too.

You won't be able to use the loan payment as an expense on your Schedule J though, since you're not on the loan documents.

[sillywalks]

Wait -- if I am paying the loan payment, the insurance, tax/tag, and I'm on the title, I don't understand what you mean about schedule J? Do you mean I cannot use the loan amount on schedule J, but I can use the payment?

[tcreegan]

Hi sillywalks,

Making payments to a relative or for something in a relatives name raises red flags in a BK...want to be careful..

Wait -- if I am paying the loan payment, the insurance, tax/tag, and I'm on the title, I don't understand what you mean about schedule J? Do you mean I cannot use the loan amount on schedule J, but I can use the payment? ...Schedule J, is your monthly post-BK expenses...including what you pay for vehicle expenses; monthly payment, tags, insurance, gas, oil, etc. You might have to explain you are paying everything although [relative] is on the title/loan, shouldn't be too hard to do, not like it is the first time this has happened

I don't think a lender will let you on the title if you aren't also on the loan...but in either case you have to deal w/ Schedules B, C, and D
Complicates things, but w/ a newly purchased car w/ no equity it should be doable.

Hope this helps,

Tom in Colo

ps: If you are working on the means-test, you can find out if your BK court allows ownership expenses for paid-off, high-mileage cars.

[sillywalks]

Eeeek -- you mean I might not be allowed the ownership expense for the cars? That would hurt, for sure! I had the impression from the NoLo book that I was allowed to take the ownership expense and vehicle operation expenses for both cars? (I am listed as owner of both, pay for upkeep/maintenance, and pay the insurance on both.) Say it ain't so!

I would rather be listed on the loan, but that may not be possible at this point! I'm not sure, but I think my credit score may be in the negative numbers at this point!

Thanks, Tom!