Specific Question on Ch 7 assets

[Scottowl]

In the state of Oregon, if a filer was listed as co owner on an elderly relatives bank accounts, as well as mobile home and 2 motor vehicle titles, would the filer be required to list them as personal assets?

The intent of doing this was to avoid probate when that time comes, and the filer has no use or access to any of these items.

[justbroke]

In the state of Oregon, if a filer was listed as co owner on an elderly relatives bank accounts, as well as mobile home and 2 motor vehicle titles, would the filer be required to list them as personal assets?

Yes. It will also depend on how the accounts are listed. If they are joint tenancy or co-owned. Does the operator between the names read "and" or "or"? Does the account also have the "joint tenancy" in the name/title?

The intent of doing this was to avoid probate when that time comes, and the filer has no use or access to any of these items.

This is what's so funny about Estate planning. Some things are good, and some things are bad. If one of the parties ended up in Bankruptcy, (like you are thinking) that "ownership interest" could become property of the Bankruptcy Estate.

Also, you may still end up in probate if someone contests the assertion that you actually co-owned the account. Perhaps, you were only put on the accounts to help financially manage the elderly person's affairs. At least that's what your siblings and other interested parties will say

You may even get into an Adversary Proceeding (AP/complaint) in the Bankruptcy Court because other heirs or potential heirs may assert the co-ownership. That's because your ownership interest in that property is property of the BK estate and may become non-exempt, exposing it to liquidation. Your family members will probably call you all sorts of names because you lost family money by filing.

I'm just giving you one viewpoint.

[Scottowl]

Ouch

It is me that is considering filing. Any possibility of those assets being attached to the case would kill it for me. I would do everything in my power to avoid that situation, as it would be a violation of the trust the elder relative put in me.

You may remember a few weeks ago I posted, listing income and debts, and their cause. I can squeak by, but sometimes I must miss work to care for my disabled wife. Those weeks are painful.

After spending a lot of time reading about situations others are in, we decided not to rush to file. In 3 years our picture will brighten, as our 2 largest monthly payments (besides mortgage) will end. We realized we are not yet in crisis, and a BK is a last resort.

However, the BK possibility is always right around the corner (we are one or two paychecks away from it at all times), and I want to prepare for that.

I did convince the relative to take me off one bank account as co owner, and list me as the payable on death beneficiary. He is considering replacing the vehicles. I was thinking of having me listed as survivor on the new vehicle(s), and changing his mobile home title. Is this a better way of planning, and would there be a period of 'seasoning' required between the time of this action and a BK filing?

Maybe it would be better to leave things as is, and consider a Ch. 13. In that event, and if I had to list these items as assets, would the BK court notify the elder relative as to what is going on?

Even one question can get complicated! If I am prattling on, I apologize!

[justbroke]

I did convince the relative to take me off one bank account as co owner, and list me as the payable on death beneficiary. He is considering replacing the vehicles. I was thinking of having me listed as survivor on the new vehicle(s), and changing his mobile home title. Is this a better way of planning, and would there be a period of 'seasoning' required between the time of this action and a BK filing?

I'm no asset protection expert, but seasoning could be required as the Trustee will ask if you "transferred" property within the last year or so. These are the specific things they are looking for! A quick search of the public record will show that you QC'd (quit claimed) the property back and that will open up a whole new set of questions.

Only a licensed attorney licensed to practice in your State can help you address these asset protection issues that I see. I would hate to see you in a bad place by rushing to file... only to discover you just subjected the elder's property to the Trustee's wrath... err... liquidation powers.

Maybe it would be better to leave things as is, and consider a Ch. 13. In that event, and if I had to list these items as assets, would the BK court notify the elder relative as to what is going on?

The BK Court wouldn't notify them. However, you'd have to pay at least the value of your interest in all that property to the unsecured creditors in your Chapter 13 case (known as the liquidation test).

[HHM]

THe hard assets are problematic, the bank accounts can usually be explained if none of the money in the account is traceable to you. The bankruptcy system understands that people are placed on accounts as a back-up or custodian. In the bank account scenario, being on the account is not the asset, it is the money in the account. If the money in the account is directly traceable to its source and the deposit wasn't payable to you, you will be fine.

But the hard assets will be problematic. Like it or not, you now have an ownership share in the equity of those assets.