Can a vehicle be taken during the bankruptcy of a CO-owner?
The other answers are misleading. you should consult an attorney in your state. Bankruptcy exemptions vary from state to state.
For example in Colorado an individual filing for bankruptcy can keep their vehicle(s) as long as their equity in the vehicle doesn’t exceed $5,000.00.
Your sister’s bankruptcy attorney may be able to successfully argue that she is not the owner of the vehicle and holds only "bare legal title" to the vehicle. in other words, if you made all of the payments, paid for all of the maintenance, etc., your sister really doesn’t have any equitable interest in the vehicle. On the other hand, if she has made payments, has maintained the vehicle, etc., the trustee will argue that she owns at least half of the equity in the vehicle. If you sister’s equity in the vehicle exceeds the exemption amount, the trustee could sell the car, pay you the value of your interest in the car, pay your sister the exemption amount, and then keep the rest for the benefit of your sister’s creditors.
As you can see, the possible answer is much more complicated than the other responses indicate, you should talk to an attorney. you definitely don’t want your sister to be transferring assets to you immediately preceding her bankruptcy filing without consulting an attorney. you may be sued by the trustee for a fraudulent transfer.
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