Cars & Exemptions

[metoo]

I'm married and currently have 2 cars both in my name only and both paid off. I only get one exemption since they are both in my name. One is worth about $3,500 the other around $11,000. If I trade the $3,500 car in and purchase a new (to me) car and put both myself and my wife on the title will we both get an exemption now? Might not matter since the new one would probably be financed and the note would be close to the value anyway.

[justbroke]

Are you filing Chapter 7 or Chapter 13, as our answers may be different with that information. Also, if you provide your State and whether you are filing jointly (both on the petition), the collective "we" can provide a more thorough response to your question!

[metoo]

Sorry, Ch 7 and jointly in Ohio.

Thanks!

[lrprn]

Ohio allows only $1000 equity exemption for automobiles, so you are in a heap of trouble.

Purchasing a new car protects one car since there will be no equity, but leaves the other completely vulnerable. Your trustee is going to want that $11,000 car. If you want to keep it you'll either have to pay the trustee $10,000 in payments for it or sell the car yourself, then buy a $1000 junker car to get by and spend the remaining money before filing.

Unfortunately, Ohio is one of the worst states to file bankruptcy in. Ohio bk exemptions are notoriously stingy.

[metoo]

They just bumped it up to $3,200, so it's a little better. Yep, I will have to buy back the other car, but maybe I can use that $3,200 to offset some of it?

[SuzieBK]

Yes, if both names are on the title, you can both claim the exemption. So I would ask the attorney if you could re-title the car or if that would be fraudulent.

Otherwise, yes, you can use your $3,225 vehicle exemption and (if you want) the $1,075 wild card exemption to at least get $4,300 of the buy-back price of your $11k car.