QUESTION
Can I still file for bankruptcy even after giving my car back to the dealer?
Asked on Jan 11th, 2015 on Bankruptcy - Michigan
More details to this question:
I gave my car back to the dealer for the fair market value. I could not afford it, since I am not working. The dealer paid off the car loan. I gave permission to my former spouse to use the $854.00 equity to buy a new leased car on October 20, 2014. Can I still file bankruptcy? If so, when?
8 ANSWERS
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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You should be able to file almost at any time. If you file less than 91 days from the transfer of the $854 to your ex-wife (assuming she was already divorced to you at the time), the chapter 7 trustee may ask to get that money from her, but the amount is so small that most trustees would not bother as it would cost more to try to get it back in fees and costs. She also could negotiate with the trustee to return a percentage of that amount in exchange for not putting up a fight if the trustee happens to ask for it back.
Answered on Jan 19th, 2015 at 7:17 PM
Based on the information you provided, you can file immediately.
Answered on Jan 14th, 2015 at 7:00 PM
Turning a vehicle back is not an action that would leave you ineligible to file bankruptcy. The gift of $854 to your former spouse could be questioned as a preferential transfer, but the amount is below the thresh hold of what a local Chapter 7 Bankruptcy Trustee might act upon.
Answered on Jan 14th, 2015 at 6:58 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Giving away money or other valuable assets while you're in debt is called a fraudulent transfer. Your bankruptcy won't be affected but there is a possibility that the trustee will demand that your ex repay the $854.00 to the bankruptcy estate. In Ohio the period of liability for a fraudulent transfer to an unrelated person is one year.
Answered on Jan 14th, 2015 at 12:34 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Surrendering the car does not affect your right to file a bankruptcy. You will have to disclose the transfer on the Statement of Financial Affairs, but if the exchange was for a reasonably equivalent value, there should be no repercussions. The gift of loan of $854 is probably too small to raise any hackles, although the Trustee will ask about it. Good Luck.
Answered on Jan 14th, 2015 at 10:43 AM
2 Awards
You may file at any time.
Answered on Jan 14th, 2015 at 10:24 AM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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Yes, you could file now. You would have to explain the transfer of equity to the court. You should consult with a qualified bankruptcy atty to proceed.
Answered on Jan 14th, 2015 at 9:34 AM
You can file bankruptcy before and after returning a vehicle. Assuming you are eligible and there are no equity issues relating to other assets that you own, Chapter 7 may make the most sense for you. To determine eligibility and other issues with filing, you should contact a bankruptcy attorney. Most bankruptcy attorneys do free phone and in-person consultations.
Answered on Jan 14th, 2015 at 9:31 AM