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She has filed a PA bankruptcy?
Yes in the process.The paperwork has been handed in several times, time lapses and they ask for more income info.
Pennsylvania allows you to choose between the state exemptions or the federal bankruptcy exemptions. If you decide to use the Federal bankruptcy exemptions you can exempt up to $3,450 of equity in your car.
So if you gift her the car,
the equity in the vehicle would be exempt if she used the full federal exemptions,
You can also put her name on the car, and place a security lien for the full amount
that would reduce the equity in the car as well,
Are you saying to put the car in her name and mine and then also place the lien on it ? Can I put the car in her name and
Because this is really an insurance issue, which is compounded by the bankruptcy, can the car be put in her name
if the equity is limited, and can be exempted,
you can just have her name on the car
and the friend whose insurance it will be carried under. Can I then put the lien on it also?
if you place a lien, it would not be considered a gift, and you should have a written agreement such as a promissory note, stating the loan payments,
Wouldn't this then be considered a sale, and subject to sales tax? The kid is just squeaking by now. She can't come up with a few hundred dollars to pay sales taxes. Or would be be considered a transfer between relatives?
It would be a sale, if you want to gift it to her, you should not have a secured lien,
In this situation, I would add her name to the title,
and if the equity in the car is less than the federal exemption, she can keep the car.
So can I gift her the car and put it into her name and mine, therefore retaining ownership so to speak?
the bankruptcy court will let her keep it, if their is limited equity that is the main issue,
the car must have less than $3450 in equity,
if you have any further questions please do not hesitate to ask
Okay, just one thing yet to clarify. If the title is in 2 names, my daughter would only have 50% ownership, if car value is $12000/$6000 would be her portion, she still owes $9500 on it therefore has no equity in the vehicle at this time.
that is possible,
however if she is on title,
it is better to state the value of the car is $12,000
with $9500 in equity,
that still leaves the car exempt
The bankruptcy trustee may feel this is an outright gift,
so the exemption should be used,
We should then also have the promissory note to show that there is still money owned on it?
and a letter from you stating she is paying the loan payments
Okay thank you so much for the information.
good luck, and make sure you use the federal exemptions for the car
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