Son transferred car title out of my name JUST BEFORE I planned to file bankruptcy

Asked over 2 years ago - Los Angeles, CA

Years ago, I co-signed the car loan for my son's new car & both my name & his name ended up on the car title. The car's been paid off for over 4 years now.

Recently, he removed me from his title & left only his name. He did it as a precaution to protect his car which he's worked very hard to pay off.

But now I've learned that what he did is considered a "transfer of property" & that he should have removed my name long ago because property transfers shouldn't take place within 12 months of filing.

1) Can I be held responsible for this transfer if it was my son who did it? (He didn't realize it'd negatively affect my bk case)

2) I've never made one payment on the car & I can show proof that all payments came from his bank account. Will this be enough to show I'm not hiding assets?

Additional information

I should add that we both willingly signed the title when he first got the car. I signed the title just because I was a co-signer on his car loan but the car was his and he made all payments on it.

I haven't yet filed chapter 7.

Just recently my son removed me from the title at the local tag agency. He did this by himself.

The car title said 'Jane Doe OR John Doe'. The "OR" in between our names means either one of us can make changes to the title or sell the car without needing the signature of the other. Therefore he didn't need my signature/permission to remove me from the title (and similarly, I could have removed him from the title without his signature/permission). If there would have been an "AND" between our names then yes he would have needed my signature.

Because he's the one who transferred me out of the title, I'm not sure if I would be held responsible of transferring assets.

Attorney answers (2)

  1. Curtis Lamar Harrington Jr

    Contributor Level 20

    Answered . You used the word "planned" which causes me to think you have not filed yet.

    You also said that your son divested you of title without your knowledge or permission. How did he do that? did he sign your name without your knowledge?

    You should consider:

    1. Delaying your bankruptcy filing date. (you might also delay based upon other factors)

    2. Consider making a showing and disclosing that your ownership was to facilitate financing, show the sales price and all the canceled checks and perhaps an afidavit from your son.

    (be careful about how son was able to divest you of title). Beware your 341(a) meeting also. (making admissions about your son's divestiture of your title.).

    If the transaction is reversed, the trustee can reach out for the car and bring it backin, and that means you may end up losing an amount of your exemption necessary to restore the car back to him.

    Consult your bankruptcy attorney on the timing of filing for THIS and OTHER considerations.

    Please remember to designate your question's BEST ANSWER.

    Please remember to designate your question's BEST ANSWER.

    Curt Harrington
    (562) 594-9784
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    Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal... more
  2. Alan D. Walton

    Pro

    Contributor Level 19

    Answered . This is not your problem, it is your son's. That being said, you may be able to undo the transaction and protect your half of the vehicle. You need the assistance of counsel in this.

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