Would this be considered a property transfer?

[Char]

Back in Dec. 2008, I became underemployed and was unable to meet my auto loan payments. I borrowed money from my mother to pay off the balance of the loan. At the time, I was a joint account holder on her bank account and with her permission issued a check to the lender with my signature. I have not been able to make any repayments to her thus far.

In Sept 2009, I learned my fiance and I were moving out of state since he received a job offer. I added her as a lien holder to my title as a promise to secure her loan to me. After doing my research I don't know if my actions would be considered a property transfer by the court - any opinions?

[backtoschool]

Yes that is a property transfer. If you have equity in the car, you have just transferred half of the equity to her, and since she is a family member, and/or insider, she got half of that equity at under market value (ie free). The trustee will go after your mother for her half of the equity if the transfer occured in the last year.

But if there is no equity in the car, then even though it is a property transfer, there is no value to the property so there will not be an issue with the trustee most likely.

[frogger]

If you had exchanged the money and title at the same time, you might have had a chance. The situation you are in however will most likely be kicked back by the trustee due to the fact that there was no present consideration when the title was altered. Backtoschool is right.

[Char]

Looks like I will need to wait until the look back period clears and I now have lots of time to prepare for the possibility of filing BK. Does anyone know what the look back period is for insider preferential payments? I really need to start paying her back soon.

[backtoschool]

Looks like I will need to wait until the look back period clears and I now have lots of time to prepare for the possibility of filing BK. Does anyone know what the look back period is for insider preferential payments? I really need to start paying her back soon.

The lookback period for preferential payments to insiders is a year. You cannot pay your mother back more than $600 in the year preceding your filing. This is how I became an asset case. I gave my mother $1,000 in two checks to help her with her expenses, and the trustee went after my mother for the money.

You can pay your mother up to $600 though and not have a problem. If you make several smaller payments that do not exceed $600 in the course of the year, you will not have a problem.

[Char]

The lookback period for preferential payments to insiders is a year. You cannot pay your mother back more than $600 in the year preceding your filing. This is how I became an asset case. I gave my mother $1,000 in two checks to help her with her expenses, and the trustee went after my mother for the money.

That's just unfair and heartless. I can't imagine the needless stress it created for you and your mother. I'm so nervous about having to face the possibility of filing BK and then have the possibility of someone going after my mother seems like a horror film.

I have lots to learn still and I really appreciate this forum!

[frogger]

That's just unfair and heartless.

Why? It's the law, so you play within it, just as the trustee does.

[norcal]

I had the same situation with my mother. At the time of adding my mom to the title (September 2009) we had already figured that we would not be filing BK and that we would in stead work with settling our credit cards. I, in fact settled with two cc companies around the same time. This was the borrowed money from my mom. I explained this to my lawyer and he said that will have the explanation for the trustee, but that I have to know that the trustee could take my vehicle (no lien). I had to weigh that risk with the close to $80,000 we owe to credit card companies (after the two I settled with). I'm willing to take that risk to get out from under the landslide we are in right now.

[backtoschool]

I had the same situation with my mother. At the time of adding my mom to the title (September 2009) we had already figured that we would not be filing BK and that we would in stead work with settling our credit cards. I, in fact settled with two cc companies around the same time. This was the borrowed money from my mom. I explained this to my lawyer and he said that will have the explanation for the trustee, but that I have to know that the trustee could take my vehicle (no lien). I had to weigh that risk with the close to $80,000 we owe to credit card companies (after the two I settled with). I'm willing to take that risk to get out from under the landslide we are in right now.

The trustee is trained to look for transfers of property to family members just like this. The trustee will allow you to "buy back" your vehicle from the estate and make payment arrangements. But I would expect the trustee to go after the car.

[norcal]

Yes, I've been informed by the lawyer that it's possible to lose my vehicle, though I can honestly state that at that time we were not considering bankruptcy. I am willing to sacrifice it if it comes down to it for the better of my family. I wish I had known about this website back then, even though we weren't planning to file. I would have at least been better informed.

[coolmom04]

The lookback period for preferential payments to insiders is a year. You cannot pay your mother back more than $600 in the year preceding your filing. This is how I became an asset case. I gave my mother $1,000 in two checks to help her with her expenses, and the trustee went after my mother for the money.

You can pay your mother up to $600 though and not have a problem. If you make several smaller payments that do not exceed $600 in the course of the year, you will not have a problem.

This is a little OT, but were you given the option to pay the TT the $1000 rather than him/her going after your mother?

We've paid my MIL $1100 over the last year paying for a loan she gave my husband six years ago. Our attorney gave us the impression that we'd be allowed to pay the TT the money rather than having him go after MIL.

[backtoschool]

This is a little OT, but were you given the option to pay the TT the $1000 rather than him/her going after your mother?

We've paid my MIL $1100 over the last year paying for a loan she gave my husband six years ago. Our attorney gave us the impression that we'd be allowed to pay the TT the money rather than having him go after MIL.

Yes I paid the trustee myself. I would never make my mother pay. But my mother got a letter from the trustee demanding payment. He sent the letter to her before I even knew he was going to go for that money. Once she got the letter, I was able to make arrangements with the trustee and pay him directly.

[coolmom04]

Yes I paid the trustee myself. I would never make my mother pay. But my mother got a letter from the trustee demanding payment. He sent the letter to her before I even knew he was going to go for that money. Once she got the letter, I was able to make arrangements with the trustee and pay him directly.

So the TT is holding your case open until the money is distributed among the creditors? After that, will they close your case?

That really sucks that he sent your mom a nasty letter. I hope we can avoid that. Our relationship with MIL is already bad enough due to this BK, so I can just imagine what would happen if she got a letter in the mail demanding she pay that money!