Expert: Terry Leeders - 12/21/2007

Question
QUESTION: my father has filed bankruptcy personally.  The car i own at the time was titled to myself and the corporation for insurance purposes.  I have made every payment on the car and the loan has the corp on it but is not listed in the bankruptcy. Should i apply for new title with the corp releasing interest in the vehicle or is it safe from the bankruptcy court using it as an asset to repay his debts.

ANSWER: If the car is not in your father's name, then his personal bankruptcy should have no effect on the car.  I assume your father owns part of the corporation.  If the court is pursuing corporate assets, then any transfer would be an issue in the bankruptcy case.  You should speak to your father's lawyer about any impact a transfer would have.

---------- FOLLOW-UP ----------

QUESTION: My father is the sole owner of the corp, and they are going to sell his property to satisfy his debts. Does that effect my vehicle? Also if he gets a buyer for it, or it brings more at auction does he get any of the left over proceeds if it sells for more than his debt? thank you

Answer
You have 1/2 interest in the vehicle.  So, if the court is looking to liquidate assets, you will usually have the option of refinancing the vehicle and giving 1/2 the value to the trustee from the proceeds, or you can let them liquidate the vehicle, and take 1/2 of the proceeds.  The asset is split 50/50 between you and the bankruptcy.