Help! Confused about car exemption

[copperarab]

I am in Oklahoma... will be filing for divorce in the next 5 months, after THAT is over, will most likely be filing bankruptcy.

I have been reading, but still am confused. I currently have a 2005 car that has payments still. I am HOPING to get enough out of the house equity at the divorce to pay this car off in full or close to it. The car is currently blue-book valued at $18000, owe just over $16,000 at the moment. Give it another year before I file bk, the car value will be a touch lower.

Here in OK there is a vehicle exemption of $7500. What would this mean to me? IF the car was paid in full OR almost paid in full? I will be VERY poor after the divorce as a fulltime college student/parttime worker raising a grandchild and receiving state aid. I will have no other assets and will most likely be well below the poverty level for 2 people.

Will I be forced to sell the car? It will be the only nice thing I have..... PS: Car is in husbands name only right now. Was a gift 2 yrs ago from him. Not 100% sure I will even get it in the divorce.



Thanks!!

[CindyLou]

worse thing you could do it to pay off the car!!! You could, however, refinance the car through your bank or credit union and put down 7000...that way you keep your equity below you exemption. one thing to keep in mind if you are getting state aid it that you wil have to report this money AND this car to these agencies and this will affect these things also. This money may seem like a great thing, but just be very careful about how its handled. I would suggest you get some advice from legal aide on how you handle these transfers.

[spell]

Hire an attorney to help sort this stuff out today.
He'll help your figure out if it's best to file before or after the divorce.

For example:
The proceeds of a recent home sale often get the same exemption as if it were still owned.
But, once you start doing stuff with those proceeds, all bets may be off.
In my state, you could keep $15k from the sale in a bank account and no one would bat an eye.
Use that $15k to pay off a car, now you've got a car that the TT would make you surrender.

Right now, you don't own a car, your husband does. After your divorce is final, the car would be transferred to you.

[JRScott]

Don't pay off the car.

Since you cannot yet be certain what you would get in a divorce I would not overly worry about it.

However if you pay off the car you'd have to pay the difference between its value and your state's exemption to the trustee to keep it. (Assuming the value is more than the state exemption).