Question about selling a car before chapter 7....

[jessicarg]

I will try to keep this as short and sweet as possable. :-)
I am not personaly filing for chapter 7 but my parents are in North Carolina.7 years ago when I was 17 I bought a car but it was put under my mothers name because I was not 18. I made the car payments. 3 Years later I moved to a different state and left the car with my sister because I didn't need to bring it with me. She made the payments, but we kept it in my moms name because she was there with her. 3 years after that my sister did not need it anymore and my parents paid the last few payments and now it's paid off sitting in there driveway till I can get it shipped to me.She(My sister) mostly made the payments to my mother in cash then my mother would write a check to the bank. So at this point there is not much proof that the car is mine.Just our word,and to make matters worse it is still registered and insured in my mothers name because she uses it from time to time. I need the car now and want to get it shipped to me but my mother called me today to tell me that she asked her lawer about it and he told her that if she gives me the car now and I transfer the title to my name there is a very high chance that her creditors will come after me and take the car because it was titled in her name before the chapter 7.He said even if she sells it to me they can still come after me. Does anyone have any experience in this or have any ideas of what to do. The car is mine just in her name.

Thanks in advance for any help you can offer.
Jessica

[nc73]

I will try to keep this as short and sweet as possable. :-)
I am not personaly filing for chapter 7 but my parents are in North Carolina.7 years ago when I was 17 I bought a car but it was put under my mothers name because I was not 18. I made the car payments. 3 Years later I moved to a different state and left the car with my sister because I didn't need to bring it with me. She made the payments, but we kept it in my moms name because she was there with her. 3 years after that my sister did not need it anymore and my parents paid the last few payments and now it's paid off sitting in there driveway till I can get it shipped to me.She(My sister) mostly made the payments to my mother in cash then my mother would write a check to the bank. So at this point there is not much proof that the car is mine.Just our word,and to make matters worse it is still registered and insured in my mothers name because she uses it from time to time. I need the car now and want to get it shipped to me but my mother called me today to tell me that she asked her lawer about it and he told her that if she gives me the car now and I transfer the title to my name there is a very high chance that her creditors will come after me and take the car because it was titled in her name before the chapter 7.He said even if she sells it to me they can still come after me. Does anyone have any experience in this or have any ideas of what to do. The car is mine just in her name.

Thanks in advance for any help you can offer.
Jessica

If the car is not exempt yes they can come after you for it.

[SinkingFast]

"Selling" or giving you the car could be considered a Preferential Transfer of an Asset to an Insider by the BK Court.

You are an Insider. Insiders are family, friends, and close personal business associates. The reason this is such a touchy issue is because,............ Many people have tried to hide assets of the BK Estate by distributing things to family and friend prior to filing. So now, any property transferred to an Insider within 1-2 years (can't remember the precise time frame) prior to filing BK MUST be disclosed.

It's a Preferential Transfer because Mom opted to deal with you over or before her other Creditors. Proceeds from the sale of the car could have been used to pay Mom's other Creditors.

And, yes, the attny is correct. The Trustee can void the transfer, seize the car from you, and sell it on behalf of the benefit of your Mother's Creditors.

Now if Mom sold the car to a complete stranger and used the money for the benefit of herself or her dependents, that would probably be acceptable to the Court. Say the furnace needed fixing and winter is coming on. Mom could sell the car and use the money to fix the furnace. That would be an acceptable transfer of the car.

[niconico]

7 year old car?

what kind of car is this? how much could it be worth after 7 years?

mine is about 8 years old and it's only worth
$800. It does have 170K miles on it and its beat to hell but if you turn the key and keep it below 50mph it'll take you where you want to go...

I think a 7 year old car should be exempt but what do I know...

[SinkingFast]

The problem for the OP is,.............. The car is in Mom's name and Mom is potentially gonna file BK.

Transferring the car to Daughter on the eve of filing BK will raise a red flag with the Trustee.

Possibly exempt or not, it looks like the Debtor tried to dispose of Assets prior to filing. Transferring the car now could open the door to the Trustee digging further, and deeper into Mom's BK.

[jessicarg]

SinkingFast, Thanks so much your information, even though it wasnt what I was hoping for, it helped alot. :-)
The car isn't 7 years old. It was 4 years old when I bought it so it's going on 12 years old ( Chevy Cavelier Z24 1996) Blue book in NC is only about $1,600 in good condition. The thing that might save me is my father decided to fill the title out a little over a year ago with my information at that time.He put me down as the buyer. My address changed right after that and I could show the courts a copy of my lease to prove the date that I moved, but it(title) wasn't notarized and I never filed for a new title at that time so it really just boils down to my own stupidity and just because it's shows a date of over a year ago and has my old address theres still no way to prove when it was filled out. For all they know I could have lied and filled it out last week with old info. I didn't realize until last month that I could register it here in Utah and insure and park it in NC till I could afford to ship it. I also didn't know how bad off my parents financial situation was.
I guess I'll just ride it out and see what happens, it sure would have been nice to have a 2nd car though :-)

How long does it take to find out if it's exempt?
Thanks again
Jessica