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Consider this scenario

Person A takes out loan then uses it to buy a car unsecured.

Person B steals the car and forges the registration.

10 years pass. Statute of limitations on civil theft in nevada is 3 years I believe. Debt still exists. Delay was lack of funds for lawyer.

Does Person B now legally own the car? Can anything be done to get it back? Does the debt matter? Cant Person A or the creditor file some lawsuit?

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Applicable Laws

Some of the pertinent statutes of limitations in Nevada are as follows (with references to the relevant Nevada statutes):

Fraud 3 yrs. §11.190-(3)(d)

Injury to Personal Property 3 yrs. §11.190-(3)(c)

Contracts Written: 6 yrs. §11.190(1)(b); Oral: 4 yrs. §11.190-(2)(c)

Collection of Debt on Account 4 yrs. §11.190-(2)(a)

Judgments 6 yrs. §11.190(1)(a)

To enforce the unsecured debt, the creditor must sue within either four or six years of the date that the debt was due an not paid, but the date from which the statute of limitations on collecting the unsecured debt is calculated is restarted every time a payment is made on the debt by Person A, and every time that Person A reaffirms the debt in writing.

The statute of limitations for fraudulent transfers is four years from the date of the transfer, or, if longer, one year from discovery of the transfer if it was made by a debtor with an intent to defraud a creditor.

There is an adverse possession statute of limitations for tangible personal property. I don't now what it is in Nevada, but it is probably 3 to 6 years from being dispossessed of property and is the statute of limitations for replevin actions (i.e. lawsuits to recover physical possession of tangible personal property).

Application Of The Law To The Facts

We don't know enough from the question to know if the debt owed by the unsecured lender to Person A is or is not owed. But, it would be quite likely that the statute of limitations to enforce the debt has run and that the debt cannot be collected.

Also, usually, in the event of a car theft, Person A would have obtained insurance on the car and would have insurance proceeds available to pay for some or all of the amount owed on the unsecured debt. The insurance company's obligation to pay if a request was made and not payment was made, would have run six years (at most) from the demand for payment, so it is too late to collect from the insurance company now if that wasn't done.

Does Person B now legally own the car? Can anything be done to get it back?

Stealing the car and forging title not recognized by anyone else would not generally give rise to title, or even voidable title to the car. But, if the state accepted the forged title this would create a presumption that Person B was the owner of the car, and it might not be possible to overcome this presumption after the statute of limitations for fraud (three years from discovery of the fraud) has run.

Also, the criminal statute of limitations on the car theft and fraud has probably already run.

Person B might be able to acquire title by adverse possession, although this is more problematic when property is subject to a certificate of title like a car is. Possession ripens into absolute title, as a general rule, when the statute of limitations for bringing a replevin claim (i.e. a lawsuit to gain physical possession of tangible personal property) has expired.

On the other hand, simple theft does not generally create title even in the face of a claim of adverse possession, so put for the intervention of the certificate of title process, a ten year stale claim to take possession of the car might work. The certificate of title issue, however, turns the question from one of adverse possession to one of title gained by fraud.

Does the debt matter?

No. This is an unsecured debt, so the fact that the proceeds were used to buy the car is irrelevant.

Cant Person A or the creditor file some lawsuit?

Person A's possible lawsuits are explored above.

The creditor might have been able to file a fraudulent transfer lawsuit against Person B within the four year statute of limitations after the certificate of title was registered (which would have run long ago), on the grounds that property of the debtor was obtained without receiving reasonably equivalent value in exchange. But, Person A clearly didn't intent to conceal this asset from the creditor or to hinder the creditor, and usually the law of fraudulent transfers is only applicable.

Conclusion

The most likely scenario, ten years later, is that all of the statutes of limitations that apply have run.

If the debt has been in default for at least six years and not been paid or affirmed in that time period, it is barred by the statute of limitations.

The unsecured lender probably never had a claim against Person B and if the unsecured lender did have a fraudulent transfer claim, the statute of limitations probably ran four years after the fraudulent certificate of title was submitted to the State (or at least four years after it was issued) which would have run long ago.

Person A might have a claim to undue the fraudulent registration of title to the car, but more likely, the statute of limitations on enforcing that claim has run.

Thus, most likely Person A doesn't owe the debt any longer, and Person B can keep the car as its legal owner.

But, without more facts and a bit more legal investigation, it isn't possible to know for sure.

Are These Outcomes Unfair?

This isn't a very troubling result, because failing to take any kind of action for ten years in a situation like this one, knowing who the perpetrator is, is pretty inexcusable for someone who really did have their car stolen and the registration forged, even if they couldn't afford a lawyer?

It doesn't cost anything to report a car stolen to the police, and if the car had been reported stolen, the state probably wouldn't have accepted the forged certificate of title papers, and the State probably would have prosecuted the offender promptly if that is what happened.

Also, it doesn't cost anything to make an insurance claim, and since you are required to have insurance and should get some insurance on the car in addition to liability insurance if you are at all prudent and the car is worth anything, not having insurance and not making an insurance claim are pretty inexcusable, and the insurance company could have used its lawyers to pursue a claim against Person B for the money the insurance company had to pay to Person A.

And, furthermore there is no good reason to feel any real sympathy to the unsecured lender who failed to bring a lawsuit to collect an unsecured loan that presumably was payable in much less than ten years and has been in default for a long term. The unsecured debtor presumably wrote off the debt for tax purposes long ago.

The legal system isn't self-executing, and people can't just do nothing at all and expect the system to vindicate their rights ten years later when they feel like doing so.

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  • It was reported, they said it was a civil matter. Vegas police are garbage. The car was registered without insurance. I canceled the insurance 12/22 and they got their own insurance 12/31 and registered the car 12/23. – Dan Jun 27 at 6:26
  • It's been less than a year, by the way, just seeing what the staute is. – Dan Jun 27 at 6:27
  • By the way, does filing the police report count as extending the statute of limitations? – Dan Jun 27 at 6:28
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    @Dan No. Filing a police report does not extend the statute of limitations, and indeed, provides a latest possible date upon which it can begin running in cases where notice is relevant. – ohwilleke Jul 2 at 4:09

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