QUESTION
What happens if my car is under my mothers name and she is filing for bankruptcy?
Asked on Jun 19th, 2011 on Bankruptcy - Georgia
More details to this question:
I have fully paid it off and I have owned it for quite some time now. However it is under my mom's name and she is now filing for bankruptcy. I want to make sure that she is being honest with me because she has told me that she can't sign it over to me now (which makes sense) but what does not make sense is that when I asked her about selling it so I could just get my money back she had told me that her lawyer told her she can't sell anything. Now what I don't understand is that even though it is in her name the car is fully paid off and I figured if that is the case it could be sold. Anyways I am trying to figure out the truth here because either she is lying to me, or her lawyer has no idea what he is saying or lastly she really cant sell it even though it is fully paid off. All I want is to get at least my money back and get a new car and want to know if she is lying to me in a car being fully paid off not allowed to be sold to get my money back. I truly appreciate you taking the time for this matter I have been looking for literally five or six hours to find an answer.
10 ANSWERS
Any sale or transfer of the car shortly before the filing of a bankruptcy would look like a fraudulent transfer. If she transfers the car to you, the chapter 7 trustee could sue you to set aside the transfer and get the car back. At the same time, the transfer of title to you would cause your mother to lose her exemption for the car. It would be better to list the car as an asset and exempt it if possible, or list the car in the debtor's statement of affairs as property held for another (you). Sincerely, Michael Berger Michael Jay Berger Certified Bankruptcy Law Specialist The State Bar of California Board of Legal Specialization
Answered on Jul 14th, 2011 at 12:13 PM
The car in your mothers name is an asset of her bankruptcy estate. If it is fully paid off and there are not enough exemptions to cover the equity in the car, the bankruptcy trustee can take possession of the vehicle and liquidate it to pay off creditors. It is unlikely this will happen so long as your mother does not own any other valuable vehicles. The reason for this is there is a specific exemption statute the covers cars. Depending on which state she is in she may use state or federal exemptions. Depending on the state exemptions she may have between 3500 to aprox. 7500 of equity available to exempt. If the total aggregated value of all vehicles exceeds this, she may use the Wild card exemption to cover the balance if there is enough Wild card left. If she is out of exemptions, you may be out of a car. She can not transfer it to you without reasonable consideration (money generally). Otherwise it will appear to be a fraudulent conveyance. She can not sell it because the proceeds would become harder to exempt and also would be an asset of the estate. Unless there is some way or reason you can show a trustee why it is in her name the situation is untenable. Sorry. Thanks for tuning in!
Answered on Jul 08th, 2011 at 10:34 AM
Information provided doesn't create an attorney/client privilege nor constitute an offer of services and is only general responses to hypotheticals
Bankruptcy Attorney serving Herndon, VA
at
Maureen O'Malley
Update Your Profile
Your mother, through her lawyer, is telling you the truth. Selling it or transferring it to your name at this point would be fraudulent and the trustee could bring it back or her discharge could be denied. It may be that it can be kept, depending on how much it's worth and how much else she's exempting, so have her ask her lawyer about that. The next question is who drives it, and why it's in her name? If you drive it exclusively and it was put in her name for a good reason, the trustee might accept an affidavit to that effect and write it off as your property rather than hers. Again, have her check with her lawyer.
Answered on Jun 23rd, 2011 at 8:56 AM
Bankruptcy Attorney serving Concord, CA
at
William Rubendall Attorney at Law
Update Your Profile
All property titled in the debtor's name is property of the bankruptcy estate. The debtor cannot sell of give away the property prior to bankruptcy without , in effect, giving it to the trustee. There may be a right to exempt the property in order to keep it. You may want to consult with a bankruptcy attorney in this regard.
Answered on Jun 21st, 2011 at 2:44 PM
Your mother owns the vehicle. You do not own the vehicle. It is part of her bankruptcy estate. If she gave it to you before she filed, the system would require you to give it back so it could be sold to help pay her debts. By keeping the vehicle, she may be able to protect it from the court, so when the bankruptcy is complete, it can be given to you without a problem. Your bankruptcy law may allow her to keep a vehicle but not the cash it generates if it is sold. Sounds like her attorney gave her good advice.
Answered on Jun 21st, 2011 at 2:36 PM
Bankruptcy Chapter 7 Attorney serving San Diego, CA
at
Law Office of Asaph Abrams
Update Your Profile
You don't lose your shirt in bankruptcy; I have clients with decent tops and blouses. The car may not be an "issue." Ask your mom to grant the lawyer permission to speak to you (if there's no conflict). Or shell out a shekel to consult with independent counsel.
Answered on Jun 21st, 2011 at 1:11 PM
Litigation Attorney serving Portland, OR
at
Daniel G. Hoarfrost
Update Your Profile
If the title is in her name, then it will potentially be an asset of her bankruptcy.In Oregon, she has a $3,000 exemption that she can apply to the car.You haven't stated what the value of the car is, but if it's sold by the trustee, she can exempt the first $3,000 from the sale.Of course, she could decide to apply the exemption to a different car and, even if applied to this car, you have to rely on her good graces to turn the money over to you.
Answered on Jun 21st, 2011 at 1:05 PM
Spencer Hale
She can sell the car. It just has to be sold for value. So either she does not understand what her attorney told her or maybe her attorney is ultra conservative in his approach.
Answered on Jun 21st, 2011 at 12:48 PM
The answer is that she cannot sell it prior to the bankruptcy without raising a red flag to the bankruptcy trustee that she is trying to manipulate the system. The car is in her name so it is by all rights her asset and if she would not be able to protect it in bankruptcy, she sure can't protect it by selling it and then filing bankruptcy. That would result in the bankruptcy trustee reversing the transaction, seizing the vehicle and probably even denying her a discharge of her scheduled debts.
Answered on Jun 21st, 2011 at 11:30 AM
Glen Edward Ashman
If she signs it over now, she will be in severe legal trouble, and you also will be. You are at major risk of losing the car. Do NOT talk with her lawyer. You are an adverse party to your mother and need a good lawyer ASAP.
Answered on Jun 21st, 2011 at 10:03 AM