Trade in of car

[Jf24]

I will be filing soon, married but filing by my self. My car was old and hanging by a thread. Bought one the other day. Lawyer advised that it should be in my name due to my trade in. And my wife can cosign if needed.

I told the dealer it will be in my name. Came back not approved and told him my wife will cosign. Well after all day there and as we're signing the papers one of the last ones he told me to sign in the cosigner spot and I said that's wrong, my wife is cosigning. He said we got a better rate if it's in your wife's name and you be the cosigner. I wanted to pass out at this point.

How does this affect the transfer of my trade in. When talking to the layer(before this, have not seen him yet after) I told him I may get between $1500 and $2000 for my car but they only gave us $500 for the trade in. He also mentioned a deduction I can take having the car in my name. Is it still considered in "my" name being a cosigner in regards to all this? The registration is in my name.

[mountanddo]

The attorney already advised you that it should be in your name due to the trade-in and the deduction so there must have been a good reason why he told you that. I don't know the answer to your question but hopefully you didn't do something that isn't reversible should it turn out to be the wrong decision. I'm not sure why people do things that go against their attorney's advice and ask questions after the fact hoping that it will all be okay.

[Jf24]

In the 20 to 30 seconds that I was speechless with the pen in my hand above the cosigner area I had it all running through my head. My 2001 car with 144000 miles on it with many problems was one of them. Before this my wife also spoke about going into bk with me if necessary. I thought about this at the time. So there may be a last resort alternative if this is bad. Just wondering where I stand being on the cosigner end of it.

[LadyInTheRed]

If you traded in your car for one that was in your wife's name, you would have made a transfer of the older car to an insider. But, it sounds like title to the new car is in your name, not your wife's. If that is the case, you probably don't have a problem. Your wife will still be on the hook for the car loan. So, if you want to get rid of liability for the car loan in case you default after BK, your wife will have to file too.

The "deduction" your attorney mentioned is probably the vehicle ownership allowance on the means test which can only be taken if you are making lease or loan payments on the car. The question is whether the fact that your wife is the primary obligor on the loan is an issue that would prevent you from taking the ownership allowance. I'm guessing not, but check with your attorney.

In the future and for the benefit of others reading this, always take more than 20 to 30 seconds to decide whether to sign an agreement that is different from what you expected. Never sign something that is contrary to the advice of your attorney without first consulting with your attorney and understanding the risks.

[OhioFiler]

I don't see any difference in terms of your bankruptcy whether you are signer A or signer B. You are still assuming the debt and you are on the title to the vehicle.

Lots of people buy new cars just prior to filing bankruptcy. If you have an asset worth $500 and you trade if for another asset worth $15,000 with a $14,500 note on it your net worth hasn't changed one bit.

[mountanddo]

I don't see any difference in terms of your bankruptcy whether you are signer A or signer B. You are still assuming the debt and you are on the title to the vehicle.

Lots of people buy new cars just prior to filing bankruptcy. If you have an asset worth $500 and you trade if for another asset worth $15,000 with a $14,500 note on it your net worth hasn't changed one bit.

I guess my point was that his attorney, that he is paying I might add to give him advice, advised him to do one thing and he did another without consulting his attorney first. Now what he did may indeed be ok and not determental to his filing BK, but he does not know that or he wouldn't have posted a message here asking. Why go through all that when he could of just delayed the purchase for a few hours and consulted with his attorney to find out if it would be okay? Why take the risk if you don't have to.

[OhioFiler]

I guess my point was that his attorney, that he is paying I might add to give him advice, advised him to do one thing and he did another without consulting his attorney first. Now what he did may indeed be ok and not determental to his filing BK, but he does not know that or he wouldn't have posted a message here asking. Why go through all that when he could of just delayed the purchase for a few hours and consulted with his attorney to find out if it would be okay? Why take the risk if you don't have to.

I agree with you 100%.

[LadyInTheRed]

I guess my point was that his attorney, that he is paying I might add to give him advice, advised him to do one thing and he did another without consulting his attorney first. Now what he did may indeed be ok and not determental to his filing BK, but he does not know that or he wouldn't have posted a message here asking. Why go through all that when he could of just delayed the purchase for a few hours and consulted with his attorney to find out if it would be okay? Why take the risk if you don't have to.

You are right! It sounds like he succummed to the pressure of sitting at the finance officer's desk at the car dealership. They are good at getting you to sign on the dotted line. Everyone who finances a car needs to prepare for the pressure and be ready to resist it. When I bought my first car, I didn't resist as well as I wish I had. When I bought my 2nd car, right before filing BK, I was better prepared. The increased use of the internet over the 11 years between the two purchases helped alot. I got online approval from Honda Financial for the loan at their advertised rates and then negotiated the purchase price via email with the dealer. I negotiated simultaneously with several dealers and then worked the dealers with two lowest prices against each other. Then I asked the dealer I purchased from to send a copy of the contract before I went to pick up the car. It took a lot of the sales pressure off. The finance guy still tried to sell me some extras. But, I told him at the beginning "Here's a copy of the contract I intend to sign. I won't agree to anything different." The guy knew pretty quickly that high pressure tacticts wouldn't work with me. He still ran through all the things he is supposed to try to sell me, but quickly passed them by as I repeated "no thank you" in reponse to everything. I did decide to buy the maintenance contract, but only after he was done with his list did I ask him to go back and show me the details so I could decide if it was worth the cost.