What happens if my car is under my mothers name and she is filing for bankruptcy? 19 Answers as of July 11, 2013

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.

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
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
Answer Applies to: California
Replied: 7/14/2011
Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
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!
Answer Applies to: Connecticut
Replied: 7/8/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
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.
Answer Applies to: Virginia
Replied: 6/23/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The lawyer is right. She can not transfer it now or sell it. If the trustee tries to sell it, you can object and prove you paid for it. Go the local bankruptcy courthouse and look up your mother's case. That way you can see what is going on. The car should be listed on Schedule B as belonging to you.
Answer Applies to: California
Replied: 6/22/2011
You will lose your car.
Answer Applies to: California
Replied: 7/11/2013
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    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.
    Answer Applies to: California
    Replied: 6/21/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    It all sounds right to me. They should explain on her papers that the vehicle, though in her name, actually belongs to you and you made the payments. If you really want to protect your rights in that car, you can attend her meeting of creditors and tell the trustee the story about the car and ask the trustee not to take it and allow you to transfer title into your name. IF your mom's lawyer prepares the papers correctly, the car will be exempt from the trustee's taking anyway and the trustee will have no interest in your car. Relax.
    Answer Applies to: California
    Replied: 6/21/2011
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    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.
    Answer Applies to: Michigan
    Replied: 6/21/2011
    Law Office of Asaph Abrams
    Law Office of Asaph Abrams | Asaph Abrams
    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.
    Answer Applies to: California
    Replied: 6/21/2011
    Daniel Hoarfrost, Attorney at Law
    Daniel Hoarfrost, Attorney at Law | Daniel Hoarfrost
    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.
    Answer Applies to: Oregon
    Replied: 6/21/2011
    Jackson White, PC
    Jackson White, PC | 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.
    Answer Applies to: Arizona
    Replied: 6/21/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    What your mothers lawyer is saying is absolutely correct. Transfers of assets just prior to filing bk are highly suspect and are always scrutinized by the court I doubt you will lose your car.
    Answer Applies to: California
    Replied: 6/21/2011
    Burnham & Associates
    Burnham & Associates | Stephanie K. Burnham
    Right now your Mother and her attorney are evaluating the assets and allocating exemptions to maximize what your Mother can keep. Your Mother may be using a very specific exemption for your vehicle that she could not use if it was cash. Since the vehicle is in her name, any sale proceeds would go to her Bankruptcy Estate and would not be able to go to you. Your Mother maybe trying to look out for you, and if you have questions you may want to ask your Mother whether or not she is planning on exempting the car. It is very difficult to understand what is happening behind the scenes with the attorney when you are not the client.
    Answer Applies to: New Hampshire
    Replied: 6/21/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    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.
    Answer Applies to: Indiana
    Replied: 6/21/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You mother is not lying to you. Your car is a fully paid for asset of her bankruptcy estate and she cannot sell it and give you the money, or transfer it to you while in bankruptcy. If she did, the trustee could go after her for a fraudulent transfer and get the money and use it to pay her creditors. Unfortunately if the car is yours, you should have had it in your name a long time ago. The trustee can look at all transfers, especially to family members, and when appropriate go after the money or the item transferred and unwind the transaction. I f she sells the car, it may change the nature of the assets and either make it not exempt., and thereby payable to her creditors, or she will have to explain exactly what she did with the money and generally it can only be spent on the necessities of life, of which giving it to you is not one of. Sorry and good luck to you and your mom.
    Answer Applies to: Michigan
    Replied: 6/21/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    What you are being told is correct as far as it goes. Because the car is in your mother's name, it belongs to the bankruptcy estate when she files for bankruptcy. It cannot be transferred or sold without the Trustee's permission. Also, atransfer to you within 1 year of the bankruptcy filing could be undone by the Trustee. Of greater concern, if she is not able to exempt the value of the vehicle, the Trustee may come and take the car to sell and use the money to pay her creditors. In that event, you would lose the car and receive nothing for it. You may want to hire an attorney for an hour or soto look at your specific situation and the exemptions your mother has claimed for the vehicle in her bankruptcy (if any).
    Answer Applies to: Colorado
    Replied: 6/21/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The first question is who purchased the car, regardless of whose name it is in. If she did, then the car is subject to her bankruptcy trustee. If you did, you need the receipts to prove it and the trustee has no real claim to the car as she only has bare title and you have an equitable interest. Neither you nor I have enough facts to know exactly what the situation is, but the attorney should be trying to protect assets from sale by the trustee. The attorney could be correct not to sell it now. One possible reason could be that there may be an exemption he can use to protect the car, but if was sold and turned into cash, she would have cash instead of a car and there may not be an exemption in her state to cover cash, so selling it would lose the right to an exemption that could be used if the asset was still a car.
    Answer Applies to: California
    Replied: 6/21/2011
    Ashman Law Office
    Ashman Law Office | 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.
    Answer Applies to: Georgia
    Replied: 6/21/2011
    Law Offices of Virginia E. Fortunato
    Law Offices of Virginia E. Fortunato | Virginia E. Fortunato
    If your mom is contemplating filing for bankruptcy she cannot sell or transfer any assets at this time. You should speak to an attorney in your area or perhaps even your mom's attorney so that you can discuss how the trustees in your area may treat the asset. A trustee is appointed in every bankruptcy case to oversee it and administer assets. It sounds like the car should be listed in your mom's petition with her interest in the assets as $0. The question may become can you prove that you paid for it. Just because the car is in her name does not make it hers for bankruptcy purposes. Hope this information helps.
    Answer Applies to: New Jersey
    Replied: 6/21/2011
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