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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2611
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I LIVE IN STATE A COMMUNITY PROPERTY STATE, IF I FILE

Customer Question

I LIVE IN WASHINGTON STATE A COMMUNITY PROPERTY STATE, IF I FILE BANKRUPTCY ALONE WILL MY WIFE'S CAR WHICH IS FREE AND CLEAR AND WORTH 10,000 BE SOLD TO SATISFY MY CREDITORS ?
Submitted: 10 months ago.
Category: Bankruptcy Law
Expert:  DrakeLAW replied 10 months ago.

Hello and welcome to JustAnswer, my name is ***** ***** I am an attorney. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. This question and response may be viewed by other parties as noted in JA’s terms of service. By continuing, you confirm that you understand and agree to these terms. By continuing, you confirm that you understand and agree to these terms.

It could be. Do you also own a vehicle?

Customer: replied 10 months ago.
I OWN A VEHICLE WORTH 3000.00
Customer: replied 10 months ago.
I HAVE A PICKUP WORTH 3000.00 .WHAT ARE THE CHANCES THEY WOULD TAKE MY WIFE'S CAR? BECAUSE THIS IS A COMMUNITY PROPERTY STATE ?
Customer: replied 10 months ago.
MY WIFE'S CAR IS WORTH BETWEEN 8,000 TO 10,000 DOLLARS
Expert:  DrakeLAW replied 10 months ago.

No longer available for phone call today but I hope to answer your questions in this forum or can do a phone call in the morning. Washington has relatively low vehicle exemptions in the amount of $2,500 each. So you can "protect" the equity in 1 vehicle for a total of $5,000 or in two vehicles for $2,500 each. What will happen with the exposed equity is the trustee will ask for you to make an offer to purchase the vehicles back from the estate. Then the vehicle will be put to auction to see if your offer is exceeded. Depending on your trustee, you generally do not have to give up possession of the vehicle but you should attend the auction in case you need to bid higher.

Example: You use $2,500 exemption for wife's vehicle and bid $5,000 to purchase the vehicle from the estate. You would be out of pocket only the additional $2,500 whereas other buyers would have to come out of pocket the full $5,000 so you generally stand in a stronger position. Plus, most buyers are looking for a steal and won't bid on a vehicle unless there is substantial upside. For that reason, I suggest "stacking" the exemptions by putting the full $5,000 on your wife's vehicle. That leaves a few thousand in equity in both vehicles which is generally not enough for other buyers to take interest in because they can't make enough money on it. And I would put about a $500 additional bid if the trustee comes asking. Make sense?

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