Can we keep 2 cars?

[akchrist]

My husband and I are filing jointly so I believe we can keep both but I want to be sure. The concern I have is that the cars are still very new and are both in my husband's name. We have a 2006 Ford Mustang that we owe about $11000 on and a 2007 Chevy HHR that we owe about $11500 on. The payments total less than $600 per month for the 2 and that is why we want to keep both. Does it matter that they are both in my husband's name, can we each still use an exemption? Does it matter that there may be a small amount of equity in them? What if we are 2 months behind, do we need to catch up on the payments before filing? Thanks!!

[BigJohn]

Are you filing a chapter 7 or 13?
What State are you in?
How much 'real' equity do you have in each vehicle?

[justbroke]

As BigJohn wrote, we need to know several things before responding. Our answer is dependent mostly on whether you plan to file under Chapter 7 or Chapter 13. It also matters if there is other property you're trying to keep (like a home).

[akchrist]

It would be chapter 7 and no on any other property as we were able to do a short sale of our home. We are in California. The equity value is about $6000 total for both cars

[justbroke]

Does it matter that they are both in my husband's name, can we each still use an exemption? Does it matter that there may be a small amount of equity in them? What if we are 2 months behind, do we need to catch up on the payments before filing? Thanks!!

If filing jointly, it won't matter if they're titled jointly or singularly. (For System 1: Looks like the exemption for vehicles is $1,900 for California, and this can't be doubled when filing together. For System 2: if you're homestead is already gone, then you have plenty of room using the unused homestead exemption.)

You're thinking there is $6K in equity in them? You should really check by using the Kelly Blue Book (private party) or NADA (wholesale) price to see. So long as you're not severely upside down on them, they are new, and they get decent gas mileage, you may want to keep them.

If you're behind in payments, then the car note holder may seek to repossess them. You should be caught up on payments before filing... as that's the best situation to be in.

I don't have any California specific knowledge, so hopefully a California person will chime in.