Car Transfer

[moenez]

Hello I'm new here. I am hoping one you can help me with a question. Me and my husband are really considering filing bankruptcy. Hospital bills and credit cards are killing us.

We think we will qualify based on our income we just have a question about a car we had. Two months ago we gave out 21 year old daughter our old 91 Ford Explorer with 197,000 miles on it.

A friend of ours told us that if we file for bankruptcy now the bankruptcy court will take the car back from our daughter or they will dismiss the bankruptcy because of fraud. Does anyone know if this is true or not? It's her only form of transportation to get to school and work. I would hate to do this to my daughter.

[despritfreya]

NO THIS IS NOT FRAUD. It is called a "fraudulent conveyance" which, while could be the result of actual fraud, is also defined simply as "an unequal exchange of value". This second and more typical definition means you transferred something but got nothing in return or what you got in return was worth less than what you gave away.

You must disclose the transfer (question 10-Statement of Financial Affairs). You must indicate that you received no $$ for the transfer and you must indicate the vehicle's fair market value. The Trustee would have the right to recover the vehicle or its equivalent value from either you or your daughter HOWEVER, I can't imagine that a 1991Explorer is worth a lot. As a result, if the Trustee raises an issue you should just offer to cash him out. All in all, not a big deal and certainly not something that would cause your case to be dismissed so long as you disclose it.

Des.

[tcreegan]

Hi moenez,

Did you actually transfer the title to your daughter?

I agree w/ despiritfeya, put it on the BK forms in the right place and you will have no problem. Around here a 91 Ford Explorer w. 197K miles sells for $600-$700, easily handled in a BK.

Tom in Colo