If my husband files bankruptcy, will my car be an asset?

[tripp]

my husband has a lot of debt that he incurred with his ex before we met and got married, and he is considering filing for bankruptcy. We have no assets, either jointly or in his name, other than my car, which is in my name only and was bought before we got married. But I'm not sure how this works with only one person in a marriage filing. Also, my father in law has a lien on my car since he paid off the last $1000 I owed while I was in school. I don't know if my car would even be considered an asset since he would be filing alone, and the car is in my name. If it matters at all (for the value of my car) my car is a 2001 chevy caviler in ok condition.

so if my husband were to file, could my car be considered an asset that could be seized? or no because it in my name?

a clear answer and a source as to where you found it or how you know would be greatly appreciated.

[kalvin71]

Only debt incurred after your marriage is both of your responsibilities. Debt incurred by you husband before the marriage as well as all assets are not effected by a bankruptcy.

You did not mention what type of debt your husband has. There are certain types of debt that cant be discharged in bankruptcy. Tax debts, child support, and student loans are all examples of debt that cant be discharged.

Although your husband may be able to file bankruptcy without it effecting you personally, the bankruptcy will effect you later in the fact that if you go to buy a car or home and use his income as a basis for the loan, then they will take the bk into account. This may cause you to have higher interest rates, or be denied altogether.

Talk to someone who can advise you for your situation. Look at all aspects of what bankruptcy means, both now and for the future.

[ern]

No, your car won't be an asset.

It's possible for one spouse to file a bankruptcy while the other doesn't. A bankruptcy court doesn't have any jurisdiction over you unless there is some specific event that gives them that authority. Filing for bankruptcy protection is one of those events. He filed, you didn't.

Even if it could be seized, it might be worth it to the trustee. Each state has a list of exemptions. These exemptions designate what a creditor can't take from you in a legal proceeding, including bankruptcy, unless they pay you a certain amount for it.

You don't say what state you live in so, for conversation sake, let's say your state's vehicle exemption is $2,000. That would be $2,000 in equity. That means that if a bankruptcy trustee wanted to take your car they must:

- give you $2,000;
- payoff anything owed on the car*;
- pay for any costs necessary to seize and sell the car;
- pay any administrative costs; &
- get money to pay creditors (otherwise, what was the use?).

What is your 2001 Chevy Cavalier worth? Could it be sold for enough to meet all of the qualifications above? Keep in mind the trustee is seeking a quick sale, so it's probably going to an auction or going to be listed in an auto trade magazine for a short time period. He won't clean it up, market it, and hold out for the best price.



* any money owed on the car must be a valid lien. If it isn't a valid and perfected lien the trustee can list it in the bankruptcy and have it discharged.
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