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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31681
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am declaring a chapter 7 bankruptcy. For insurance reasons

Customer Question

I am declaring a chapter 7 bankruptcy. For insurance reasons my son-in-law (who lives with us) put my wife's name on the title of his car (no lien, he paid cash, this was 2 years ago). Do we have to declare this in the bankruptcy paperwork? Can the trustee take the car?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 8 years ago.

If your wife is filing bankruptcy, she'll have to include the car. However, once the bankruptcy is filed, she can reaffirm the debt (loan) and continue paying the car note as usual. Your attorney will fill out the re-affirmation paperwork and present it to the court in the form of a motion.

Customer: replied 8 years ago.

My son-in-law paid CASH for the car, their is no lien! They only put my wife on the car title to save on insurance. Does she have to declare it in the bankruptcy? And if she does is their a chance they could take the car even though my son-in-laws name is XXXXX XXXXX? Again, he paid cash (paid it off) for the car 2 years ago.

Expert:  Roger replied 8 years ago.

She will have to show the car as an asset. However, because the car is not 100% hers, only her interest (1/2) could be attached. As a practical matter, no one wants a 1/2 interest in a car and it is virtually worthless to anyone but her.


The property of the non-filing bankrupt party (son-in-law) cannot be included in the bankruptcy.


In short, no creditor is going to want her interest as it is not valuable - thus, they'll likely release any claim against the car and take it out of her property schedules. However, it still must be mentioned initially.

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Customer: replied 8 years ago.
So the trustee won't tell us to sell the car (value about 10000 dollars) so he/she can disburse her half of the money to the creditors?
Expert:  Roger replied 8 years ago.
She could only force the sale of 1/2 of the car - his 1/2 is not party of the bankruptcy estate. This should make the car worthless to the trustee.