MOM CAR and LIABILITY

Okay, here's the background: After graduating college I found it very difficult to find a job so I moved in with my parents for a while. They covered my living expenses while I was job hunting. After being there nearly 6 months and only landing one job interview (which I didn't get) I considered a position with AmeriCorps. I had done this part time while in college and loved it and there was an open position within 5 minutes of my parent's house. Even though I would be considered a full time volunteer I would still get a small living stipend that would be just enough to cover most of my bills and help out a little at home. While my parents weren't thrilled that I went to 5 years of engineering school to become a "volunteer" in a park, we all agreed that a little bit of pay and health insurance benefits was better than nothing. So I took the position. I stayed with my parents about another six months and was able to get my bills caught up but I was in my twenty's and they were treating me as though I was still a child. In addition my younger brother, who was still in college, was also there. Everyday there was a new argument. My supervisor came to me one day and told me that the park had a house that became available and that I could move in if I wanted. It was wonderful. A two bedroom house for $100 a month with all utilities included. Despite what you are thinking this was not a dump - they offered a discounted rent because I was an AmeriCorps volunteer. I knew it would be a stretch financially, but I would be right around the corner from my parents. Before I signed the papers I started looking for a second job to help make ends meet.
 
The Problem: Everyone thought it was a good idea except for my parents. If fact, my mother was so infuriated with me that she decided to teach me a lession and dropped me from the car insurance. Before I had a chance to start a separate policy my brother took my car (without my permission) and wrecked it. He ran a red light and hit two other cars. Nobody was injured, but he was given a ticket for running a red light and for not having any insurance. He was on my parent's policy, but they would not pay for the accident. He paid his fine with his financial aid refund from school (over $800). I still had two more years to pay on the car (at $270 a month). I have continued to pay this on time every month since the accident. It has been over 15 months since the accident. I had to move back in with my parents because I had no transportation. Also, because I didn't make enough at the park, I didn't qualify for another car loan.
     After my year commitment with AmeriCorps I started a new job in the field I went to school for and I have been working here for a few months now. While I make pretty good money now, I've been trying to pay off the car and rebuild my credit. My plan was to stay with my parents until the wrecked car is payed off then I can buy a cheap car and possibly have enough saved up for a downpayment on a house. At the time of the accident neither my brother nor I had any assesst and neither of the other driver's involved in the accident had any reason to sue. All of a sudden, 15 months after the accident a lawyer contacted me and told me I owe one of the insurance companies nearly $18,000 because of this accident. I told them that it was my brother's accident and not mine but they informed me that because it was my car I am ultimately held responsible for the costs incurred. Also, because my mother co-signed for the loan, that if we didn't pay then they would take my parent's house. The lawyer sent us a summary of what the charges were for. Most were for medical bills. Only $2,000 was for damage to the car.
 
The Question: Can I be held liable for an accident I didn't cause? Can they take my mother's house for an $18,000 debt? Especially since she is not the sole owner - my father is also on the mortgage loan with her? What rights do I have? I understand that morally, the right thing to do would be to pay the debt, but something just doesn't seem right about this. If I agree to make payments on this, I will be forced to live with my parents until I am 30 years old while my brother gets to move on with his life. I don't think that the entire financial burden should fall on me just because I am the owner of the car. The car didn't have insurance for only a few days and I told him not to drive the car because of that. He didn't listen, so shouldn't he take the responsibility? Except he is still in school and will be for another two years. Either my entire family has to file for bankruptcy or I have to live with my parents for another 5 years before I can get from underneath this debt.
 
 
I need your advice desperatly,
Jennifer


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Jennifer,
 
Uncle Jimmy is not a lawyer and must suggest legal counsel for all he situations above.
I will respond to your inquiry segment by segment.
“… While my parents weren't thrilled that I went to 5 years of engineering school to become a "volunteer" in a park, we all agreed that a little bit of pay and health insurance benefits was better than nothing.”
After 5 years engineering school, signing on as volunteer for anything might seem like a good idea, short term, but might not be so wise in the long run. Some employers might look at volunteer work after 5 years of schooling as “coasting.” While employment might not be easy to find, only 1 interview in six months does not seem like a 100% effort.
“I stayed with my parents about another six months and was able to get my bills caught up but I was in my twenty's and they were treating me as though I was still a child.”
Parents often regard their offspring as “children.” Young adults think “adulthood” is a matter of age. Legally, yes; socially, no. As long as you are living under the roof of your parents, you are a dependent and in that way, a child. You become an ADULT when you are completely self- sufficient. 

“My supervisor came to me one day and told me that the park had a house that became available and that I could move in if I wanted. It was wonderful. A two bedroom house for $100 a month with all utilities included. Despite what you are thinking this was not a dump - they offered a discounted rent because I was an AmeriCorps volunteer. I knew it would be a stretch financially, but I would be right around the corner from my parents. Before I signed the papers I started looking for a second job to help make ends meet.”

I suspect you were more interested in getting out from under your parents thumb than pursuing the employment you were trained for. Moving into that $100 house made you dependent upon a volunteer position instead of the income from your profession elect. Practical experience should follow closely after graduation, not when you get around to it. Why were you looking for a “second job” to support your volunteer position when you should have been looking for your first job in engineering?   

“Everyone thought it was a good idea except for my parents.”

It was a terrible idea. Your parents were right. “Everyone” that told you it was a good idea should be marginalized as sources of opinion in the future. Please have each send me 500 words on why it was a “good idea” to ignore your career and work as a volunteer living in a $100 house near your parents.

“… my mother was so infuriated with me that she decided to teach me a lesson and dropped me from the car insurance.”
It is my understanding that:
- Mom cannot cancel insurance on a car she does not own. Check the title.
- If the title is in your name, you own it. If the title is in mom’s name she owns it.
- Mom can cancel YOUR coverage on HER policy.

“Before I had a chance to start a separate policy my brother took my car (without my permission) and wrecked it. He ran a red light and hit two other cars. Nobody was injured, but he was given a ticket for running a red light and for not having any insurance. He was on my parent's policy, but they would not pay for the accident.”
My understanding:
If your brother took your car without your permission and caused damage because HE drove recklessly, YOU might have recourse against your brother. HE in effect “stole” your car. If HE was on your parent’s policy and was given a ticket for “no insurance” and the ONLY insurance you had was on your mother’s policy, it appears that YOU were never insured to drive your own car. This needs careful scrutiny! Check local rules and call the insurance company.
  “I still had two more years to pay on the car (at $270 a month). I have continued to pay this on time every month since the accident. It has been over 15 months since the accident.”
If your brother was responsible for the destruction of your car he has (at least morally and perhaps legally) an obligation to compensate you for his irresponsibility.

“I had to move back in with my parents because I had no transportation. Also, because I didn't make enough at the park, I didn't qualify for another car loan.”

When your own “adult” life requires a return to the nest, it is wise to accept “child” status with poise. If you don’t learn to support yourself you might be there a long time. Keep in mind that they have no obligation to take you in. I suggest a low profile while limiting your “volunteerism” to house chores and earning as much as possible.

“After my year commitment with AmeriCorps I started a new job in the field I went to school for and I have been working here for a few months now. While I make pretty good money now, I've been trying to pay off the car and rebuild my credit. My plan was to stay with my parents until the wrecked car is payed off then I can buy a cheap car and possibly have enough saved up for a downpayment on a house.”
Good focus! Keep me updated on your progress.
“At the time of the accident neither my brother nor I had any [assets]…”
The fact that you have no assets has no bearing on liability. If you cause damage you can be called upon to pay for it. That includes the possibility of garnishment of your pay check until a judgment is satisfied. If this case goes before a judge; more than likely, YOU will be sued as owner and your BROTHER as driver. 
“…neither of the other [drivers] involved in the accident had any reason to sue.”
You caused damage to their car and perhaps some personal injuries. Of course they have reason to sue. Put yourself in their place. A reckless driver comes through a red light damaging your car and inflicting injury - don’t you have the right to sue?

“All of a sudden, 15 months after the accident a lawyer contacted me and told me I owe one of the insurance companies nearly $18,000 because of this accident. I told them that it was my brother's accident and not mine but they informed me that because it was my car I am ultimately held responsible for the costs incurred. Also, because my mother co-signed for the loan, that if we didn't pay then they would take my parent's house. The lawyer sent us a summary of what the charges were for. Most were for medical bills. Only $2,000 was for damage to the car.”

If an insurance company paid expenses for damage you caused they have the right to recover such expenses from you. Vehicle owners are usually required to have insurance for drivers of their vehicle and are the first to be sued for damage caused by that vehicle even if someone else is driving. Your brother can also be sued for damages. You seem focused upon car damage when physical injury is often much more costly and just as much your responsibility. The fact that your mother co-signed for your car makes HER responsible to pay for the car, however no one can automatically take your parents house. The amount owed on your car is the limit of her obligation as co-signer. The suit against you and your brother should not affect her.   

“Can I be held liable for an accident I didn't cause?”
YES, as explained above.
“Can they take my mother's house for an $18,000 debt? Especially since she is not the sole owner - my father is also on the mortgage loan with her?”
NO - as above. Your father’s co-ownership is irrelevant.
“What rights do I have?”
In my opinion:
You have the right to hire an attorney to explain and defend your interests.
You have the right to sue your brother for using your car without permission and for damages (property and injuries) he caused.
You have the right to question your mother’s judgment if she thought that putting you on her policy extended to your vehicle.
You have the right to educate yourself before “deciding” how insurance, damages, liability, responsibility, and co-signing effect the individuals involved. 
“I understand that morally, the right thing to do would be to pay the debt, but something just doesn't seem right about this. If I agree to make payments on this, I will be forced to live with my parents until I am 30 years…”
You are correct about the morality of paying the debt. However, MORALLY, your brother seems to be the PRIMARY culprit. Additionally, your parents have a moral obligation to force your brother to shoulder a good portion of the debt you might be stuck with.
“I don't think that the entire financial burden should fall on me just because I am the owner of the car. The car didn't have insurance for only a few days and I told him not to drive the car because of that. He didn't listen, so shouldn't he take the responsibility? Except he is still in school and will be for another two years.”
NO, you should not have the entire financial burden. It makes no difference if the car was uninsured for a few days or ever. If you believe being on your mothers policy extended to your car, please investigate, - I doubt it. Since you brother was on Mom’s policy at the time of the accident, according to your theory, he should been insured for the damage he caused – right? Whether he is in school or not is irrelevant.
“Either my entire family has to file for bankruptcy or I have to live with my parents for another 5 years before I can get from underneath this debt.”
Your parents have no responsibility beyond paying for the car if you default. They will not have to file for bankruptcy. You might have to live with your parents until this matter is settled. Parents have the obligation to give thoughtful and accurate information to their children. If your parents led you to believe that you had auto insurance on your car because you were listed on their policy, they were probably incorrect. If they had insisted that you secure coverage on your car, this situation could have been avoided entirely. If I were in their position I would demand payment from your brother, reasonable board from you, and come to terms with the fact that their ASSUMPTION regarding auto insurance created the environment for this situation. At this point, if I were your dad, I would (at my expense) hire a good lawyer to protect your interests and get this behind you.
Ignorance is expensive,

Everybody’s Uncle