Need help understanding what to do?

[Bk4me]

I have retained an attorney to file chapter 7 and my attorney and I have both delayed filing for a several years, Meanwhile I have been unemployed and have been supported by my wife (she must really love me) My wife has also made my vehicle payments for several years. Now my problem is the trustee will want to sell my vehicle for the equity on the vehicle loan. How can I protect my wifes interest in the vehicle? Thank you

[justbroke]

This depends on how Nebraska treats personal property. First, Nebraska is not a community property State, so you lose that partial protection. Second, it really depends on what it reads on the title in most cases. There are different ways to title a vehicle, so it's important to understand just how it is titled.

That is, are your named joined by "OR" or "AND"? Or, even more confusing, is it titled with "Joint Ownership" with or without Rights of Survivorship? Additionally, your State may allow Tenancy by the Entireties (TBE) which is the best protection for married couples -- at least in Florida.

[Bk4me]

justbroke....the title of the vehicle is in my name only, it is a gmac loan (now ally) I am on year 5 of a 5 year 0% loan so I owe 8,000 on a vehicle worth 17,000 all day long Ally won't let me put my wife as a 2nd lien on the title (of course) and I have several judgements in county court (open) so my lawyer says I cant sell the vehicle before filing and the trustee will take the vehicle and sell it to help pay my debts. My question is how do I protect the $$$ my wife has paid on the loan since I have been unemployed?
I feel she has an interest in the vehicle !!!

[justbroke]

Unfortunately, she has no legal interest. Unfortunately, that vehicle is subject to the Trustee's disposition and sale of the vehicle. You could "buy" the equity back, but that's a lot of buckaroos ($9K)!

[BKAttyMI]

Unfortunate, sounds like you should have filed years ago. Why the delay? Your wife has no interest in the property per bankruptcy law, family law maybe. Your attorney should have been advising you on this.

[Bk4me]

I need to wait to file if I sell the vehicle thats all I know....question is how long?

[BKAttyMI]

You can sell the vehicle without a problem, but it must be sold for "fair market value" and not to an "insider", like a family member.

[chrisdfw]

What is your exemption in Nebraska? At least if the trustee sells it they have to give you that, you should probably be selling it anyway, and this way the trustee can probably sell it, allowing something that you can't do on your own, due to the judgements. Perhaps its a disguised blessing.

Not everything that on the surface appears bad is.

[Bk4me]

You can sell the vehicle without a problem, but it must be sold for "fair market value" and not to an "insider", like a family member.

What if my wife has made the payments for the last 2 years (have paper trail) and she paid the large balance on the payoff (have proof) Can't she own it ? (with discloser)

[keepsmiling]

Whoever is on the title, that is the owner. How is the vehicle titled?

[justbroke]

What if my wife has made the payments for the last 2 years (have paper trail) and she paid the large balance on the payoff (have proof) Can't she own it ? (with discloser)

No (period). Legal title is what is the deciding factor.

[Bk4me]

No (period). Legal title is what is the deciding factor.

So what your telling me is I can not sign the title over to her NOW and wait to file my bk ?

[Bk4me]

[justbroke]

So what your telling me is I can not sign the title over to her NOW and wait to file my bk ?

I am saying this. If you want to transfer title to her for the purpose of hindering, delaying or defrauding creditors from getting at that asset... then no. However, an asset protection attorney or bankruptcy attorney can help you pre-plan for your bankruptcy. Moving assets around right before filing is a big red flag. There are some guidelines though, and only an attorney practicing in your area can help you navigate the minefield. There are "look back" periods when it comes to "insider" transfers like this.

While your Trustee may not care, or may not even "catch" you... this is the type of thing which has resulted in many debtor's loss of the property. You know, that there is always Chapter 13. However, in a Chapter 13, you'd need to payback at least the value of the "non-exempt" equity in the vehicle (over the life of the Plan).

I think we too often forget that Chapter 7 is a "liquidation" bankruptcy. It is designed to leave you with the "minimum" necessary items to live or at least reach that "fresh" start.

[Bk4me]

justbroke...I respect your opinions and have read your forum posts and thank you for your advise, I have hired an attorney and he feels that I will be ok thru this even thou it's an insider transfer. I guess it's a crapshoot weather the trustee wants the vehicle from my wife after she has paid MORE than fair market value in payments and payoff over a 2 year period. God I hope not she is ready to kill me now after supporting me all this time. one thing for sure is she will lawyer up and fight back if that happens.