Bankruptcy

Debtor Loses Car Titled Jointly With His Child

By Jonathan Alper

Parents who buy cars for a child often hold title to the car jointly with the child. In a recent case from the Orlando bankruptcy court a debtor asserted that a titled jointly by the adult debtor and his child was actually the child?s car. The debtor asserted that while his name was on the title, the child held the entire beneficial interest in the vehicle and therefore, the car should not be turned over the Chapter 7 trustee.

The bankruptcy court disagreed with the debtor?s argument. The Court held that Florida statutes govern car ownership. Florida statutes state that a car owned by two people is held as joint tenants. There are other statutes which state how a parent can own property in trust for a child, and this debtor did not follow that statute and did not show other evidence of intent to own the car in trust for his child. The Court ordered the debtor to give the car to the bankruptcy trustee.

If you want to buy your child a car you should put the car in the child?s name if you want to protect the car from your own creditors.  381 B.R. 800

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida

Full post as published by Florida Bankruptcy Law on April 17, 2008 (boomark / email).