[Vtr-tac] Dealer Bankruptcies - Tax Collector Hearings

Electronic Distribution of VTR Information to Texas Counties vtr-tac at dot.state.tx.us
Wed Nov 5 09:23:42 CST 2008

Please review and distribute as appropriate.  

There has been a recent rash of dealer bankruptcies that have caused quite a problem for customers of these dealers if the title transactions for their vehicles were not filed as required.  In some cases the customer has proof of payment of all title/registration fees.

While we all are concerned about the situation these customers are placed in, our legal counsel has advised that these vehicles might be part of the bankruptcy proceeding and recommends that we wait for a release from the bankruptcy court before taking any action to transfer title of the vehicle to the customer.  There is a possibility that the bankruptcy court could offer a general release for vehicles sold during a specific time by a specific dealer.  The department will pass along any such general release upon our receipt of the information.

It is the customer's responsibility to obtain a release from the bankruptcy court.  Neither the department or the county can intervene in the bankruptcy proceeding on their behalf.  

We wanted to pass this along to you if you are contacted by customers seeking relief either through a tax collector hearing or a bonded title procedure.  Based on legal counsel guidance, we would recommend you wait for a release from the bankruptcy court before providing alternative methods of obtaining ownership for these vehicles.



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