Can You Transfer A Car Title Before Filing Bankrupty?

As you may or may not know, each debtor is only entitled to exempt one vehicle when filing for bankruptcy. Therefore, many bankruptcy filers that own more than one vehicle per debtor inquire if they can transfer title to their vehicle to a non-debtor prior to filing bankruptcy. Is this a fradulent transfer of a non-exempt asset to a third party? Is this a fraudulent conversion of a non-exempt asset to an exempt asset? Or is this lawful pre-bankruptcy planning to maximize available exemptions?

The answer is, it depends where you are filing bankruptcy, who the bankruptcy trustee is, what the value of the vehicle is, and when the transfer is made. Bankruptcy law permits pre-bankruptcy planning to take advantage of exemptions. I would advise that in most situations, pre-bankruptcy planning to transfer the title of a car to another family member, especially if the primary driver of the vehicle is already a spouse or a child, is proper if fully disclosed prior to the 341 Meeting of Creditors.

However, every situation is different. I recommend that you consult with a bankruptcy attorney to discuss the details of your specific situation. I offer a free initial consultation and can help you file bankruptcy in Kansas or Missouri. Please leave any questions or comments below.