Beware of Transferring Property to Family Before Filing Bankruptcy
If you are considering filing for bankruptcy and also thinking about transferring property to a family member or friend in order to avoid losing a particular asset, you had better check yourself and consult your bankruptcy attorney. Check out this link for why you should not make any major transfers of property to family members prior to filing a filing a chapter 7bankruptcy or chapter 13 bankruptcy.
Transferring assets to family and friends within one year of filing must be disclosed on your bankruptcy petition as they are what is referred to as an “insider.” If you transfer assets to insiders in order to avoid having to turn over a certain assets to creditors, then a bankruptcy trustee can actually reverse a particular transfer of an asset in order to liquidate said asset. If something like this happens, it may be advisable to wait to file your bankruptcy case so that this transfer will not be an issue in your bankruptcy case. Other disclosures that must be made on the statement of affairs section of your bankruptcy petition or any assets that have been sold within 120 days of your case filing, any gifts made in the last year, and you must list any creditors you have paid over $600 in the 90 days prior to your bankruptcy filing. To have your bankruptcy case go according to plan and with no problems you should avoid moving assets around and avoid paying debts besides those on your secured property and for living expenses prior to filing. In general it makes no sense to make payments on unsecured debts prior to your bankruptcy filing as those debts will most likely be discharged in your bankruptcy.
If you have additional questions regarding transferring assets prior to a bankruptcy filing please call Symmes Law Group at 206-682-7975 to set up your free initial bankruptcy consultation today!