Will my son be able to kepp half of the sale of the vehicle if we file for bankruptcy? 17 Answers as of January 31, 2012

If you sell it prior to filing and disclose properly, then it will be up to the trustee if he wants to try to go after that money. He may have enough exemptions to cover all of the money from the car and should talk to a local attorney.

It matters what it is worth. If no title, it may not be worth much and therefore he may be able to keep it.

The problem here is one of proof. If your son really owns half of the asset, then he is entitled to half of the proceeds. Proving that he owns half the asset is a different, and difficult, issue. If your son has cancelled checks and credit card receipts which show that he put up half the money to buy parts and materials to build the vehicle, then it should be a relatively straight forward matter to prove that he owns half. Even then, it is possible that the Trustee may look for proof that the money that paid the credit cards or backed up the checks came from your son. If your son's half comes from "sweat equity", or if he paid cash for everything, then you should expect a dog fight, especially if this vehicle is worth a lot of money. If your son's half comes from the fact that your husband is a good guy who wants to share this vehicle with his son, then your son loses.

When an asset that is co-owned the non-filer receives their part of the proceeds from the trustee's sale of the asset.

You might have an issue with proving that the vehicle is owned 50% by your son if there is no title and it seems like a vehicle like that might be difficult to value. Assuming that is resolved, your son can buy your husband's share from the trustee at a discounted price. You husband can also pay the trustee for his share of the value of the vehicle and keep the vehicle. This assumes that your husband cannot exempt his interest in the vehicle. The trustee prefers to sell your husband his interest in the vehicle or sell your husband's share to your son because it is quicker and less expensive so you can negotiate for a good price. If the amount involved is less than $5,000 the trustee might not even bother and abandon your husband's share in the vehicle back to your husband. It depends on the trustee and area where you will be filing as to how aggressive they are with regard to the amount that might be unexempt.

He should be able to keep half of the proceeds if half is his. He can also pay your husband half of the fair market value and then your husband can live off the money. This way the asset will be your son's and you won't lose it.