QUESTION
Two people are on title of a paid off vehicle, what happens in case of bankruptcy?
Asked on Oct 21st, 2012 on Bankruptcy - California
More details to this question:
If one of the parties claims bankruptcy what happens then?
13 ANSWERS
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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The one filing will have to exempt his/her interest. In Virginia, there is a $6000 exemption. The Trustee is not entitled to any of the non-filer's interest.
Answered on Oct 25th, 2012 at 7:16 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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It depends on the exemptions of the state and the value of the property. Make sure the person filing for bankruptcy talks to their attorney. You don't want this to ambush either party.
Answered on Oct 24th, 2012 at 10:08 PM
Administrative Law Attorney serving Ann Arbor, MI
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David J. Hutchinson
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It will likely be treated as if each owns half of the value unless something else was intended and can be proven.
Answered on Oct 24th, 2012 at 9:43 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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One half the car is owned by each person as it would whether bankruptcy is filed or not.
Answered on Oct 24th, 2012 at 9:32 PM
Bankruptcy Attorney serving Alpena, MI
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Carl C. Silver Attorney at Law
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Each person owns one half of the vehicle. If one owner files Bankruptcy his half hopefully can be claimed as exempt depending on how much exemption the owner has available. If the owner cannot claim it as exempt then the Trustee will sell the vehicle. One half will go to the Bankruptcy estate and the other half of the proceeds will go to the owner who did not file bankruptcy.
Answered on Oct 23rd, 2012 at 3:09 PM
Not enough information to say what will happen. What is it that you are worried about? The person filing bankruptcy should list his/her 50% interest in the vehicle & if s/he has any exemptions available to use, claim this vehicle as exempt. If the vehicle isn't eligible for an exemption, the Trustee will try to sell the 1/2 interest in this vehicle to you, since no one else will want it. And that could be an opportunity to obtain the full title for very little money.
Answered on Oct 23rd, 2012 at 3:09 PM
When two people are both on the title, both have an interest in vehicle. In bankruptcy, it is possible that the trustee could try to take your interest in the car, unless it is exempted. Utah allows an exemption up to $2500 for a vehicle. If you have more equity in the car than that amount, you can pay the trustee the remaining equity in order to keep the car. If the trustee did sell the car, then the other joint owner would still receive their interest in the car and you would receive the $2500 that was exempted. Call to discuss your options and what is best for you.
Answered on Oct 23rd, 2012 at 3:07 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ:, the filing person can claim a one half interest in the vehicle, and try to use his/her exemptions to prevent it from being levied or deemed an asset for the bankruptcy.
Answered on Oct 23rd, 2012 at 3:05 PM
Bankruptcy Attorney serving Myrtle Beach, SC
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Law Office of Margaret L. Evans, PC
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The vehicle should be exempted to the extent possible for the debtor-owner, and the other co-owner should be named as a creditor to protect the debtor-owner from any potential claim/lawsuit from the non-bankrupt co-owner should the trustee seize the asset and sell it to pay creditors.
Answered on Oct 23rd, 2012 at 3:03 PM
David John Tybor
As you know in Florida, filing a Chapter 7, if you are keeping your home, and the value of your car is more than about $1500.00, then it can become part of the bankruptcy estate that gets distributed to your creditors. Depending on when you need to do the actual filing of the case, there may be means to protect more of the value. If it is jointly owned, (and that depends on whether the title says OR or AND), the amount that belongs to the bankruptcy estate is 1/2.
Answered on Oct 23rd, 2012 at 2:59 PM
Chapter 7 Bankruptcy Attorney serving Milwaukee, WI
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Law Offices of Deborah A. Stencel
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In most cases, nothing. However, the answer to your question depends on the value of the vehicle and whether the 50% value can be exempted in the bankruptcy case.
Answered on Oct 23rd, 2012 at 2:59 PM
Glen Edward Ashman
It depends on the numbers. In some cases the court takes the car and sells it. In some cases there is no effect at all. A good attorney is essential towards determining that outcome.
Answered on Oct 23rd, 2012 at 2:58 PM
Chapter 7 Bankruptcy Attorney serving Santa Monica, CA
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Law Offices of Glenn T. Litwak
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The trustee can sell the car and pay the co-owner his/her share or the trustee can offer the car to the co-owner to pay the bankruptcy estate for the debtor's share.
Answered on Oct 23rd, 2012 at 2:56 PM