Car Ownership

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If my wife and I submit for bankruptcy, can we legally declare half ownership of our car valued at $16,000 therefore showing ownership for each of us a value of $8000  being only $1200 over the $6600 value allowed in bankruptcy enabling payment of $2400 to the trustee to retain ownership ?

Category: asked March 16, 2018

1 Answer

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If you both already own the car together, then the answer is “yes”.

However, if car is presently owned by only one of you (let’s suppose it’s you, the husband) and you add your wife’s name as the co-owner before filing bankruptcy, then this won’t work. That would be considered what is called a “transfer at undervalue”.

A transfer at undervalue means to transfer a property to another person for less money than it is worth, or for no consideration at all. There is a presumption that you are doing this to avoid the car from being taken by the bankruptcy trustee.