A fundamental requirement in bankruptcy law is the determination of the ownership of property. This applies to both real estate and personal property. In chapter 7 cases, the ability to exempt property from administration by a bankruptcy trustee can make the difference between retaining or surrendering property. In chapter 13 cases, the ability to exempt property can have a direct relationship to the amount of the monthly chapter 13 payment. But who owns property can become surprisingly complicated. Here are a few guidelines regarding property ownership.
Title means a lot. Ownership of some assets, such as real estate, cars and trucks and bank accounts can usually be determined simply by finding out in whose name title is listed. Real estate deeds identify the owners, as do car titles and bank accounts. Bankruptcy law sees title as a presumption of ownership. But that is only a presumption. Some property might be titled in the name of the person who didn’t purchase the asset – in cases like that, the title owner can assert that ownership is “legal” only – that the equity in the asset really belongs to someone else.
Simple rules for non-title property. Other items of property, such as off-road recreation vehicles, have registration cards. The name on the card is almost always the best way to determine who owns the asset.
We assume non-titled property is jointly owned by married couples. Most household items are not worth a lot of money after they’ve started to be used. Because of that, ownership of household goods is not much of a concern in bankruptcy cases. But for the items that are valuable, a good rule to follow is that if the item was purchased while the couple was married, the asset is owned jointly by the couple.
These are fairly simple guidelines – there can be complex issues surrounding ownership. That’s one of the reasons it is a good idea to speak with one of the attorneys at Kain & Scott when financial problems have become overwhelming. Our experienced bankruptcy attorneys will give you good advice regarding this issue, and the others that people with money problems face.
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