Boating Partner Claiming Bankruptcy, Need Help

[kkkeating]

Our family owns 50% of a boat, 2001 X-9, with another family. They have title, but we have a written contract with them that was executed in 2008. Unfortunately, we never got around to working out the title with DMV. I just learned they're about ready to file for bankruptcy. Is there anything I can to do to protect our assests? My understanding is that once they claim bankruptcy, everything goes to a trustee, and at that point it's outside my control. Any help or recommendations would be appricated.

[kgrove]

Can you offer to buy the other half of the boat from them before they file?

[JMann]

Couldn't they sell you half for minimal $$ like $100 and transfer title to you, then you both get to keep the boat but it's in your name.

[Double D]

Couldn't they sell you half for minimal $$ like $100 and transfer title to you, then you both get to keep the boat but it's in your name.

Thats what I would suggest. Whatever you do, get it out of his name.

[thatsmrmastercraft]

There are some sales that cannot happen prior to bankruptcy. I suspect this may be one. I would consult a bankruptcy attorney today.

[gsxrjtt]

I agree with Jman some friends of the family did that with their boat and it worked out just fine

[kkkeating]

I've looked into the option of buying the boat for a minimal price, but the problem is the Trustee can go back after the fact and claim it's a fraudulant sale, then reposse the boat. It makes sense, otherwise everyone would just sell all their assets for pennies to friends/relatives just before they claim bankruptcy.

[Double D]

There are some sales that cannot happen prior to bankruptcy. I suspect this may be one. I would consult a bankruptcy attorney today.

Yeah, and tell your 'buddy', to let you know more in advance next time!

[gweaver]

If your buddy is filing, he's probably working with an attorney. Might be a good time to schedule a meeting with the two of them, so the lawyer knows what's going on. Selling it for a ridiculously low price is a red flag, but if it was sold for a reasonable price (80% of current value of his half or something) it might be OK. That's a lawyer question, but I would think that since you're part owner, you're entitled to some sort of compensation because of the legal/binding agreement of shared ownership.
Just thinking out loud, but I wonder what would happen if you filed for a lien against the value of the boat, seeing as how you're legally a half-owner of it.
It might also be worth trying to get the DMV paperwork rolling, to help prove you legally have part ownership in the boat.
In any case, I'd strongly suggest talking to a lawyer. That's going to be the best chance of protecting your share in this boat. It'll probably cost $$ but that's nothing compared to the cost of losing the boat.
G

[kkkeating]

My boating partner(the "buddy" term has been dropped!) has been working with an attorney and has been very forcoming about everything. Gweaver, I like the suggestion about meeting with the two of them. The DMV paperwork probably wouldn't work out, as he has a loan on the boat and wouldn't be able to pay the debt amount, as such the loan company would not want to release title. I agree the best thing to do is consult with attorney now and lose a little money as opposed to losing a lot of money later on.

[CruisinGA]

It's Attorney time.

[SSMoose]

It's Attorney time.

It's past attorney time. Also an attorney not connected to the partner.

[mikeg205]

Darn - fractional ownership usually ends this way... - sorry to read about this. Boat will have to be sold for fair market value to settle creditors.

Maybe you will be able to work with trustee on sale. I know someone who tried to sell a boat immediatelyk prior to the bankruptcy process - sales was reversed...

Good luck...

[kgrove]

If you can prove you are half owner (which sounds like it may not be crystal clear since your name is not on the title), your friends creditors should have no rights to claim your half of the boat, just your friends half. Unless your buddy borrowed money and pledged the boat as collateral without telling you... possible since his name is on the title. This sounds like even if things end up working out for you, you will get tied up in bankruptcy proceedings. The creditors don't want a boat, they want cash, so an offer to buy the other half of the boat may be well received by both the court and creditors.

Definitely time for a lawyer. Start collecting all the documentation you can that would prove or at least support that you are indeed half owner.

[jgraham37128]

Buy it from the bank before he files

Why does everything that should end up being an easy deal turn into this? Get ready to loose some money thanks to your buddy!

I'm no lawyer but the only thing that even seems close to making sense it buying the other half fora discounted price but large enough that the loan is covered.

Another thing you may do is go talk to the bank that he owes for the boat. Show them you own half the boat, and he owns the other half. As an example if he owes $10,000 and is about to file for bankruptcy and you are willing to buy his half out for $7,000. They might just take it so they don't have to go thru the bankruptcy deal! You may come out better?