Question Cars titled jointly with kid's names

[barbhill]

We bought cars for our kids before they went off to college. Titled them jointly--one is titled with father, one is titled with mother.

Are these cars assets in bankruptcy? Can they be taken from the kids?

[justbroke]

The first question I will ask... is whether the Title has your name and your children's names separated by the word "and" or the word "or"! This is a VERY important distinction in Florida. If it was an "and", then you both have equal ownership (50%/50%). If it was an "or", then you each own the car 100%.

Unfortunately, in both cases, it is an asset of your bankruptcy estate. The key is that the "or" would be the worst case scenario. If you and your spouse are filing a joint Chapter 7 and already have your own car or cars, then these "extra" cars could turn you into an asset case. Please do not try to "fix" the titles if you are planning to file anytime soon.

[btbeme]

To reiterate what Justbroke said... the very worst-case scenario would be to drop your names from the titles and then try to file BK. That is pretty much considered to be akin to Carnation Instant Fraud, and the Trustee will have a field day making your life miserable.

Some options to discuss with your attorney... Can you legally remove yourselves from the title without Trustee grief if you can prove the kids are making every cent of the payments? Can you otherwise drop? Can you drop by selling your interest to the kids (assuming they have that cash laying around, ha ha)? What would be the "safe" timeframe for delaying a BK after dropping from the titles? How much are the cars worth (and are their loans on them)? How much is at risk using Justbroke's formula above?

Can't answer these here, but I am certain that you could ask three attorneys and get the same answers from all three (I hope). In any case, let us know what you hear so we can add your experience to The Collective.