I Have An Asset That I Don’t Want Taken From Me When I File Bankruptcy. Should I Give It To Someone Else Before I File?
By Bankruptcy Attorney on Feb 2, 2007 in General Bankruptcy Information
The short answer is no. The bankruptcy laws are largely premised on fairness. If you owe creditors money, your right to avoid paying your creditors can be altered by a number of factors, including assets which belong to you. (An asset is any thing of value, whether personal property or real property). The act of transferring an asset just prior to filing bankruptcy could prove to be a fraud on your creditors, and may prevent you from getting a discharge of your debts.
Assets which are transferred for no value, or below their fair value, within two years prior to filing your bankruptcy are subject to being taken by a Chapter 7 Trustee from the person who received the transfer so that your creditors can benefit from the asset. In a Chapter 13 bankruptcy, you would be required to pay your unsecured creditors amount equal to the value of the transferred asset.
Usually when someone thinks they need to get rid of an asset, it turns out that they have enough exemptions to protect that asset. Exemptions are laws which protect certain assets a person may have at the time they file bankruptcy. Moreover, if a person transfers an asset which could have been exempted, the right to claim the exemption is gone once the asset no longer belongs to the person filing bankruptcy.
See an experienced bankruptcy attorney in your state for an explanation of what assets you can keep when filing bankruptcy.
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