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Small Price to Pay for an Insurance Break

November 20, 1986|DON G. CAMPBELL | Times Staff Writer

Question: I own a 1978 Ford LTD, which is registered in my name. I obtained a smog certificate in April, 1986. My roommate owns a 1970 Ambassador registered in his name. He obtained a smog certificate in June of this year.

Colonial Penn Insurance is offering a two-car auto insurance discount. Between the two of us we would save $600 annually in insurance premiums. Both automobiles must be in joint tenancy. We are willing to do this.

I "braved" the Department of Motor Vehicles to obtain the necessary paper work. The DMV, however, will not accept this change, because it is considered a transfer of title and thereby a smog certificate is required. The sole exception is for immediate family relationships, such as husband-wife, father-son (same last name).

First, isn't this policy a form of discrimination? Second, smog certificates were recently obtained. Why are new ones required?--G.Z.

Answer: Unfortunately, according to Richard Wright, manager of the Department of Motor Vehicles' Public Inquiry Unit in Sacramento, some things are considered by the DMV to be written in stone--and a key one is the Vehicle Code, which spells out very specifically, and inflexibly, what is and what isn't considered an intrafamily transfer. And two roommates putting their cars into joint tenancy, alas, just plain doesn't classify as intrafamily. It's a transfer of title--period. And a new smog certificate is required no matter how recently the owners have gone through this. (It has no relationship to the normal biannual smog check that impacts all cars routinely.)

Is it discriminatory? Beats me, and Wright too. I suppose you might be able to make such a case, but I'm not sure what it would prove.

It seems to me that with a potential joint savings of $600 a year dangling in front of you, it might be well worth it to cough up another $28 apiece for a new smog certificate. Since you both passed it so recently it should be a routine check.

Q: On Nov. 5, 1981, a federal tax lien was filed against me for non-payment of income taxes for the years 1977 and 1978 in the amount of $4,600. On May 11, 1983, we declared Chapter 7 bankruptcy, and on Aug. 8, 1983, a judge signed our "Order of Discharge of a Debtor."

On one of my schedules submitted for the bankruptcy petition, the federal tax lien of $4,600 was listed. TRW, at my request, removed the tax lien from my credit profile after the bankruptcy. However, the tax lien still appears on my wife's credit profile. Repeated requests to TRW to remove it were denied.

I know the contrary is true (they removed mine), and taxes are dischargeable if they were due three years prior to the bankruptcy and timely and non-fraudulent returns were filed. How can I get TRW to remove the federal tax lien from my wife's credit profile?--C.B.

A: The trouble (one of them) is that the federal Bankruptcy Code goes to voluminous length in spelling out debts that are dischargeable--and those that aren't--but a lot of the distinctions aren't very clear-cut, according to Delia Fernandez, TRW Information Services' director of public affairs.

Which, in turn, means that a court has to address some of these things on an item-by-item basis. So what your wife will have to do, Fernandez adds, is to take the original papers (the petition and the "Order of Discharge of a Debtor") back to court and get a "Special Discharge" order that is specifically aimed at this tax lien on your wife's credit profile. With that in hand, TRW will purge the lien from your wife's record at once.

What puzzles both Fernandez and TRW's legal counsel (and you too, obviously) is why this lien wasn't stricken off both your credit reports back in 1983 when yours was removed, unless, by some fluke, TRW was given information at that time suggesting it was an individual bankruptcy and lien and not a joint action.

"But it's a little difficult now," she adds, "trying to second-guess what happened three years ago. We could have been in error, then, but there's no way of knowing. We certainly don't want to penalize him or his wife if it were, somehow, our fault.

"We'll definitely dig back in his records, though, and contact him about what has to be done."

Q: I am retired and in my 70s. Some of my savings are in municipal bond funds that have ratings from AAA to minus-A. I have run across another fund that pays 2% more than mine but deals in lower-quality bonds, ranging from BB down. I think this is what they mean by "junk" bonds. Because some large corporations are sometimes bought with junk bonds, just what kind of a risk would I be taking by buying into this fund?--S.Y.

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