Purchased car, then selling filed bankruptcy

[songbird81]

I've read about this happening when the lien wasn't perfected within a specified timeframe. I think that law blows. I hope you get to keep your car!

[Dizzam]

Well..

I am actually in the exact same situation and I live in Idaho. I'll try and explain the laws the best I can. Basically it comes down to an interpretation of these two laws:

The Trustee is arguing this law:

49-503. ISSUANCE OF CERTIFICATE OF TITLE REQUISITE TO ACQUISITION OF
TITLE -- WAIVER OR ESTOPPEL. Except as provided in sections 49-502, 49-510
through 49-512 and 49-514, Idaho Code, no person acquiring a vehicle from the
owner, whether the owner is a dealer or otherwise, shall acquire any right,
title, claim or interest in or to the vehicle until he has issued to him a
certificate of title to that vehicle, nor shall any waiver or estoppel operate
in favor of that person against a person having possession of a certificate of
title or an assignment of the certificate of the vehicle for a valuable
consideration.

However, the catch may be in the exceptions because 49-502 which is an exception to the above law states:

49-502. DELIVERY OF CERTIFICATE OF TITLE UPON SALE OR DISPOSITION --
REASSIGNMENT BY DEALERS. No person shall sell or otherwise dispose of a
vehicle without delivery to the purchaser or transferee a certificate of title
with an assignment as necessary to show title in the purchaser, nor purchase
or otherwise acquire or bring into the state a vehicle except for temporary
use as provided by section 49-432, Idaho Code, unless he shall obtain a
certificate of title in his name in accordance with the provisions of this
chapter. Any dealer holding current Idaho dealer license plates may, in lieu
of having a certificate of title issued in his name, reassign any existing
certificate of title issued in this state.

The question then is if the highlighted part of 49-502 implies that the title with a signature stating you are the assignee is enough to prove that you own the car. Unfortunately almost every single instance of case law is against you. However, this exact situation has not been addressed in the state of Idaho and thus there are no interpretations given from any judge on these exact facts.

Just as a piece of advice I would not rely solely on equity as the Bankruptcy courts in Idaho have taken the position that, and I quote, "Equity must bow to Legislature." That is from a case dealing with some of the same facts of your case.

As I said before I am in almost your exact situation, except for I have a motorcycle and not a car. I went into the DMV and titled it in my name 2 hours and 45 minutes after the seller filed for bankruptcy, now the trustee claims the bike does not belong to me. I have a bill of sales signed by both him and I dated weeks before he filed for bankruptcy, and I also have a bank statement showing my check written for the motorcycle being cashed weeks before he filed for bankruptcy. Also, I have copies of the title signed by him and I that is dated weeks before he filed for bankruptcy. I have a few lawyers working on it now, but nothing has been finalized and we actually haven't even decided if we will fight it or try and get a good settlement.

What is the update with your situation 383?

[woeisme]

I think this should be a warning to everyone out there that you need to do the paperwork ASAP when you purchase a vehicle of any kind. When I bought my last car it was from a private party transaction, and I gave the girl the $ in front of a notary public who witnessed the title transfer. In my state (Ohio) the transfer has to be witnessed by a notary, and then I drove the car to the DMV to have the title put into my name as soon as I had possession. I can't understand how you can drive a vehicle around for weeks to months without doing the paperwork, since in Ohio the old owners plates aren't even legal anymore once the car is sold. (I know in other states the plates go with the car, but here they stay with the owner, so that also forces one to immediately register the title in his/her own name or they'll get pulled over for driving without plates on the car.) I know the OP's wife probably didn't do the paperwork because she didn't want to fork over the taxes and fees to the DMV, but it's going to cost more in lawyer fees and now possibly losing the car, so again, word to the wise to not delay paying the piper or it can cost a lot more in the long run.

Maybe you should write a letter to the editor of your local newspaper warning people of the potential hazard in this age of more and more people having to file BK. I know I would have never thought about such a possibility before reading about stories like yours a couple of times on this forum.