Paying for a car for business use

[MrBoston]

I needed a new car for my own business use. Because my own credit is shot, my wife purchased it in her name, but my business has been making the payments. Will this be considered a "gift" subject to clawback when I file for Ch 7 or 13? (This will be just my filing as I incurred my debt burden before we were married. We reside in Massachusetts.) Thanks!

[justbroke]

How is the vehicle titled? Precisely... is it in your name, her name or both names. If it is in both names, are the names connected by "or" or "and" or is there some sort of tenancy on them (tenancy by the entireties, tenancy in common, joint tennants, etc)

[MrBoston]

Vehicle is titled in her name only.

[LadyInTheRed]

You may be able to claim you have equitable ownership in the vehicle, in which case you would list it as your asset and hopefully exempt it. You'll need to talk to your attorney about this.

Is your business a sole proprietorship?

[MrBoston]

You may be able to claim you have equitable ownership in the vehicle, in which case you would list it as your asset and hopefully exempt it. You'll need to talk to your attorney about this.

Is your business a sole proprietorship?

Yes. LLC of which I am the sole member

[justbroke]

I don't see that it's a gift if the title is solely in her name. Do you need that payment to qualify for Chapter 7? The real question, as LITR refers to, is whether you have any equitable interest in the vehicle. I don't know much about how marital property is treated when only one spouse is filing and the debt is titled/deeded in the non-debtor spouse's (the spouse not filing) name.

It's a very solid question for a Massachusetts bankruptcy attorney.

In re Callahan, 419 B.R. 109 (Bankr. D. Mass. 2009) (IRS failed to overcome Mass. state law presumption of gift by debtor husband when property was titled in nondebtor wife’s name);

Interesting because the title, in this particular case, was actually put in the non-debtor spouse's name. Only a Massachusetts attorney is qualified to answer this for you.

[LadyInTheRed]

I don't see that it's a gift if the title is solely in her name.

I think the concern is that the payments on the loan could be considered gifts to the wife.

[justbroke]

It's still interesting no matter how you slice it. I would really like to know how this works out.

[LadyInTheRed]

It's still interesting no matter how you slice it. I would really like to know how this works out.

Me too.