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WALLSTREETFIGHTER
WALLSTREETFIGHTER, Attorney
Category: Legal
Satisfied Customers: 17209
Experience:  14 years experience in representing clients, current member of legalshield, legal club of america, NYSUT and UFT attorney
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Daughter is in the middle of divorce and chapter 7 filing.

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Daughter is in the middle of divorce and chapter 7 filing. We are selling her a vehicle How (owes $9500, value about $12000 KBB) We are in Pennsylvania.
My insurance will not allow her stay on my insurance any longer. she needs a vehicle to
get to work/children. If I transfer the car into her name so she can get her own ins., what documentation do I need to protect the vehicle against the Chapter 7? How do I retain ownership of the vehicle until the loan amt is paid in full?

WALLSTREETLAW :

Hello I am a licensed attorney. I am here to help answer your questions. Please do not hesitate to ask for clarification

WALLSTREETLAW :

She has filed a PA bankruptcy?

Customer:

Yes in the process.The paperwork has been handed in several times, time lapses and they ask for more income info.

WALLSTREETLAW :

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.

WALLSTREETLAW :

So if you gift her the car,

WALLSTREETLAW :

the equity in the vehicle would be exempt if she used the full federal exemptions,

WALLSTREETLAW :

You can also put her name on the car, and place a security lien for the full amount

WALLSTREETLAW :

that would reduce the equity in the car as well,

Customer:

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

Customer:

Because this is really an insurance issue, which is compounded by the bankruptcy, can the car be put in her name

WALLSTREETLAW :

yes,

WALLSTREETLAW :

if the equity is limited, and can be exempted,

WALLSTREETLAW :

you can just have her name on the car

Customer:

and the friend whose insurance it will be carried under. Can I then put the lien on it also?

WALLSTREETLAW :

yes,

WALLSTREETLAW :

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,

Customer:

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?

WALLSTREETLAW :

It would be a sale, if you want to gift it to her, you should not have a secured lien,

WALLSTREETLAW :

In this situation, I would add her name to the title,

WALLSTREETLAW :

and if the equity in the car is less than the federal exemption, she can keep the car.

Customer:

So can I gift her the car and put it into her name and mine, therefore retaining ownership so to speak?

WALLSTREETLAW :

yes,

WALLSTREETLAW :

the bankruptcy court will let her keep it, if their is limited equity that is the main issue,

WALLSTREETLAW :

the car must have less than $3450 in equity,

WALLSTREETLAW :

if you have any further questions please do not hesitate to ask

Customer:

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.

WALLSTREETLAW :

yes,

WALLSTREETLAW :

that is possible,

WALLSTREETLAW :

however if she is on title,

WALLSTREETLAW :

with you

WALLSTREETLAW :

it is better to state the value of the car is $12,000

WALLSTREETLAW :

with $9500 in equity,

WALLSTREETLAW :

that still leaves the car exempt

WALLSTREETLAW :

The bankruptcy trustee may feel this is an outright gift,

WALLSTREETLAW :

so the exemption should be used,

Customer:

We should then also have the promissory note to show that there is still money owned on it?

WALLSTREETLAW :

yes,

WALLSTREETLAW :

and a letter from you stating she is paying the loan payments

Customer:

Okay thank you so much for the information.

WALLSTREETLAW :

good luck, and make sure you use the federal exemptions for the car

WALLSTREETLAW :

if satisfied with our service please provide us with positive feedback thank you

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