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  1. #1
    Join Date
    Dec 2015
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    1

    Default Can You Sell Your Car During Chapter 13 Bankruptcy

    My question involves bankruptcy in the state of: Texas

    I am in my last year of bankruptcy and paid everything off except my IRS taxes. My car was paid off but I can't get my title until I am released from bankruptcy. My car's transmission went out for the 2nd time and was just too expensive and not worth enough to keep dumping money into so I left it sitting in my driveway. Someone made me an offer to buy it so I checked with my attorney and he said the car wasn't worth anything and I could sell it because the bank wouldn't want it. The registration lapsed since it was immobile, I didn't renew. The buyer of the car knew I wouldn't have the title for 12 more months and I offered to get it reregistered for them. How do I go about making sure if anything happens that I am not legally responsible because the car title is still in my name?

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Can You Sell Your Car During Chapter 13 Bankruptcy

    Since you cannot lawfully transfer the title anything you try would be incomplete, especially since the registration would be in your name.

    You need to ask the trustee for permission to sell your car. They have the power to release the title to you and likely will if it benefits your bk case.

    Of course the trustee is also going to determine where the money you receive goes but you should already be aware of that.

  3. #3
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Can You Sell Your Car During Chapter 13 Bankruptcy

    Who has possession of the title? I assume the answer is the lender. If I am correct, unless you paid 100% of the amount owed under the contact, including interest, you are not getting the title until the discharge is entered.

    If your Plan paid the claim in full you will need to contact the lender to find out if there is any residual amount owed - typically a few hundred dollars for interest accrual that gets washed away upon entry of the discharge. You could get the title sooner rather than later if you pay off the small amount due.

    As to your question:

    How do I go about making sure if anything happens that I am not legally responsible because the car title is still in my name?
    You can't. So long as you remain the titled owner you may be subject to liability if the buyer gets into an accident.

    Des.

  4. #4
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Can You Sell Your Car During Chapter 13 Bankruptcy

    Quote Quoting aneeda100
    View Post
    How do I go about making sure if anything happens that I am not legally responsible because the car title is still in my name?
    There is one possibility.

    Require the buyer to post a vehicle title bond so he can get a title in his own name when he takes possession of the vehicle.

    The following page explains the process:

    http://smallbusiness.chron.com/texas...ess-13055.html

    And here is the application:

    http://www.autotitleservices.com/Forms/vtr-130-sof.pdf

    I suggest you go with him to the DMV and make sure this gets done properly and don't surrender the car until he has posted the bond, completed the process, and obtained (and showed you) a title in his own name.

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