Car dealer problem (insurance, vehicle, best, truck)

[brwk]

Car dealer filed bankruptcy after I purchased a car and I do have the PAID IN FULL bill of sale. I have the car and now I am told the dealers bank has the title. What do I do now? Am I protected here? Will the bank hand over the title?
Thank you,
Brian

[ji603]

Tough position to be in, obviously. Were you able to at least get plates/registration for your car? A lot would have to do with which state you're in. The DMV/MVD would be the best place to start. I bet this is becoming more common that it used to be.

I would think that you'll have one of two options:

DMV says 'sure no problem - happens all the time' and needs your bill of sale/paid in full, and issues you a bonded title or something similar.

DMV says 'sorry - civil/legal matter... sue the non-performing party to the contract (dealer) to have them release the title'


Obviously #1 is easier for you, seeing as the dealer may not be around anymore, and the courts are a mess, meanwhile your car has no title.

Things could be different if it's a used car and there is an existing title, or if it's brand new, and there has never been a title issued. It'll totally depend on your state. Ask the DMV.

For your reference, here's TX's DMV policy to their offices regarding that specific situation:

Registration and Title Bulletin #137-05

Date: December 23, 2005
To: All County Tax Assessor-Collectors
Category: Policy and Procedure
Subject: Processing Title Transactions Involving Dealer Bankruptcies

DETAILS
When it is determined that a dealer has filed bankruptcy or withheld taxes and/or title and registration fees, the following procedures should be followed:

Texas Title – Expired Registration

Modify the record to show correct expiration month and year.
From Pending Transaction screen, process the title normally and issue a no fee replacement (check same vehicle), effectively removing all title fees and exempting sales tax, etc., then complete the transaction.
Texas Title – Current Registration

Process the title transfer normally, waiving all related fees, since evidence was submitted denoting proof of payment.
Out-of-state Title and First Manufacturer Certificate of Origin

Process the title transfer using the current Title-Only procedures (Release 5.2.2 Fix 6, RTB #88-05). (Issue Temporary Tags and license plates).
Complete Form VTR-31-RTS and place the following notation at the top of the form, "NOTE: DEALER BANKRUPTCY."
Indicate the correct month/year of expiration and plate number issued on the
Form VTR-31-RTS.
Fax the Form VTR-31-RTS, along with the Title Only Receipt (RTS 500) to the Vehicle Data Management Branch (VDM) at fax number (512) 465-7736. VDM will update the plate number and expiration month and year.
After the system is updated, the county will issue a no charge replacement sticker and mail it to the customer.
CONTACT(S)


from Texas Department of Transportation

[brwk]

Thanks...
the dealer (Miami FL) gave me (MD) 2 temp tags then after the 2nd one he filed bankruptcy. I have the bill of sale, copy of all papers from the deal, the 2 temp tag registrations. The dealer lawyer says that the titles do not have the lien against them but his client has the lien against him. The lawyer had me fax all my docs to confirm that I did buy the car in full and he said he would forward this info to the correct "flooring" company. He said at that point the flooring comp would contact me. Does that sound right? Will they expect $$$ out of me? I will never buy a car again from a small dealer!!!!!
Thanks,
Brian

[brwk]

FL DMV took over back in Dec 08 and finally AUG 09 FL MVA got everything done and sent my title. FL DMV was VERY helpful and sent me temp tags each month (I sent them each month a copy of my insurance and a check for $4.50). I then went to my MD MVA and got my car registered in MD...no problems. Was a fun journey but everything worked out.

[ji603]

Glad to hear it. Cool that you followed up to your original post!

[jackmccullough]

I'm glad it worked out.

By the way, in reference to one of your earlier posts about "flooring", the way dealers finance their inventory is that they have what is called a floor plan, which is a blanket loan and security agreement for all their stock, rather than a separate loan for each car and truck they buy.

[brwk]

thanks

[captlandi]

I am in the middle of a similar problem. I purchased a used 2000 car over the phone from a Florida Dealer. He emailed me the bill of sale and odometer
Reading, promised a few times to send me the title and then went out of business. I found out that the car was registered in NJ.
How can I get a duplicate title? I live in Texas, and the DPS requires the title to register the car.