Parents bankruptcy affect me?

[kirkblitz]

I am 19 and i bought a car 3 years ago so my mother is on my car loan/title with me. My parents plan to file bankruptcy and since my car is under my mothers name and mine will they beable to come after my car? Will their bankruptcy affect mine? My credit score is 740 and i dont want it to drop or lose my car, any suggestions? btw i still owe 7k on my car so its not payed off.

[magyar123]

YOU did not buy the car 3 years ago - when you were 16, you were a minor. Your mom bought it and put your name on the title. Ask her to reaffirm the car.

[kirkblitz]

Thank you, what i meant was i put up the down payment and such. But it turns out they can take my car? Can they deny her reafirming it?

[2Bshinyandnew]

What state are you in?

This is from a Florida Attorney blog regarding What Happens When Debtor Buys A Car For His Child

http://www.bankruptcyorlando.com/2008/03/what-happens-wh.html#more

Your parents should be able to reaffirm the loan. Any equity you have in the car is a concern. Print the above article out and show it to your parents and their lawyer, if possible. If you can prove with receipts and cancelled chacks that you have been making the payments and paying for gas/repairs/insurance, a lawyer may be able to argue in our favor.

[StartingOver08]

I had a similar situation with my daughters car and my Ch 7 BK. My daughter is 20 now. We bought the car about 18 months ago with her downpayment funds and both of us on the loan and title. My concern for her was the tradeline would be marked IIB erroroneously on HER credit reports and negatively affect her for 10 years. She refi'ed the car just before my filing BK into her name only (per my attorney). We supplied all documentation to the attorney - original contract, original title showing both names, value at time of refi (upside down by several thousand), all payments she made from her acct, her car insurance, refi'ed paperwork, funds going from her new lender to pay off joint lender, proof she keeps the car at her place of residence (separate from mine) etc. The attorney also listed the property in the schedules in Schedule B under item #35 Other Personal Property of any kind not already listed. The attorney also added a paragraph in the description describing the property (vehicle), the owner (Daughter), the Location of the asset and explanation of expenses and refi. According to the attorney, this was OK. Won't know for sure until next week after my 341!

[kirkblitz]

thanks guys, im in sc btw. What concerns me is my car is worth 20k and i only owe 7k

[StartingOver08]

That is a problem. It is considered an asset. Your parents will need to speak to their attorney about it.

[kirkblitz]

They havent filed yet but will soon so i still have some time, should i refinance the car under my name or could they still get it?

[BROKENN]

I had cars owned by my minor children with my name also when I filed BK. Upside down cars are easier, but I used my exemptions and added the cars to it. It never appeared on their credit report. Kelly Blue book rated them very low.

Any recent change will be a preferential unless 1 year beyond as I understand. Check that out a bit before coming to conclusions.

[2Bshinyandnew]

thanks guys, im in sc btw. What concerns me is my car is worth 20k and i only owe 7k

You can see the South Caroline Bankruptcy Exemptions below:

http://www.bankruptcyaction.com/scexemptions.htm

Looks like SC has a less than generous exemption list. $1200 motor vehicle exemption, which is probably per/debtor, so if your parents are filing jointly, the max they could get for TOTAL motor vehicles is $2400. If they have cars they need to exempt too, the equity in your car may be a bigger issue than reaffirming.

While your folks are sorting their business out, get copies of all your bank records and receipts evidencing that the down payment came from YOUR funds, and the monthly payment/insurance etc. came from YOUR bank account. This will prove that your parents do not have equitable interest in the car. That they hold legal title in trust for, or as a nominee for the (now adult) child, and that the (now adult) child has all equitable interest in the car.

Don't now if it will work in SC. It has been argued successfully in Florida. Your parents attorney will know better, and having the financial proof ready before any attorney consults may help your position.

FWIW, my mom, (my daughter's grandma), bought my daughter a car for her High School Graduation last May. My daughter was 17. The title was put in my name because the insurance was almost $3000/yr less that way. My daughter was already listed as a driver in the house. If the car was in her name, she couldn't add the car to my policy. I had no idea I would be considering Bankruptcy, so we did it that way she saved a lot of money. My daughter pays all expenses on the vehicle.

She got in a fender bender in August, T-boned at an inersection. Totally not her fault. The cost to repair was $1900, minus the $500 deductible. The car was drivable, just looked awful. I had no idea I would be considering Bankruptcy, so we fixed the car. What a waste of $$$$. Granted all but $500 was insurance payout, but, had I known?

I'm hoping for a few more fender benders between now and when I file (as long as no one gets hurt and nothing else gets damaged!!). My daughter does not know about my bankruptcy, but every scratch decreases the value, which at this point is about $6,000. I will probably have to buy it back from the trustee, even though my attorney is going to TRY and show that I don't have, nor did I ever have any equitable interest in the car, my daughter even paid the $500 deductible out of her account to repair the T-Bone. Failing that, I will have to find a way to buy it back, none of this was her fault.

MY own mother is gonna FREAK. She bought the car in the first place

[kirkblitz]

I cant really seem to get any help in this situation from my parents because all they care about is keeping their home. I think they intend to let them take my car and keep one of theirs since theirs are not near as valuable. I guess im just screwed

Thanks for your help

[StartingOver08]

Kirkblitz, it seems you think that your parents intend to let the BK court take your car. Really they have no choice as to what the BK court will take or not take. There are limited exemptions in place and the BK trustee is not there to be nice - they are there to FIND THE MONEY for the creditors. Believe me, none of us wanted to be in this spot. The best thing you can do now is try to be supportive of your parents as ALL of YOU are going through a hard time. This is the time for family to stick together.