Can I transfer my assets before filing for bankruptcy?
It’s not hard to understand why you must list all your debts and assets when you file for bankruptcy. Usually, you will be expected to provide information about your income and expenses. But what happens to any asset transfers that you might have made before you filed your case? This is a question we get often. For this reason, our bankruptcy attorney in Overland Mo felt he should debunk some of the myths surrounding asset transfers before filing for bankruptcy. Here is what you should know.
The bankruptcy estate and your trustee’s role
All of the property you own when you file for bankruptcy becomes part of your bankruptcy estate. It’s your trustee’s role to oversee and administer your estate. They will be responsible for ensuring that your estate contains everything required by law. Based on bankruptcy laws, a trustee has the right to sell any assets that are not on the exempt list and use the money to pay off creditors. As part of the procedure, you must disclose any transfer of assets made two years prior to the bankruptcy filing. This goes for Chapter 7 bankruptcy. In Missouri, a trustee can go back as far as four years and recover any assets sold during that period.
should you transfer your assets?
The short answer is – no. It’s not advisable to sell any of your assets right before you file for bankruptcy. Not only does transferring your assets expose those who own them to a lawsuit but this can also put your bankruptcy discharge at risk. A transfer will be considered fraudulent if:
- You intentionally transferred property with the intent of defrauding the creditors or delaying the process.
- The transfer is made for less than fair value.
- The transfer left the person transferring the asset with less capital than reasonably necessary.
Consequences of fraudulent transfers
Transferring property prior to filing for bankruptcy is likely to cause the bankruptcy trustee to launch an investigation against you for potential fraud. If proven guilty, the court will render the transfer void and order a return of the transferred money or property. The transferee may also be required to pay a sum equal to the value of the asset transferred.
Chapter 7 Bankruptcy in Overland Mo
Transferring property right before you file for bankruptcy is one of the easiest ways to ruin your case. It’s much easier to be forthcoming about any transfers made within the look-back period if you wish to quickly get back your financial freedom. Given the intricacies of bankruptcy cases, it’s advisable to first consult a bankruptcy attorney to avoid making mistakes that might be hard to undo. For a bankruptcy attorney in Overland Mo, look no further than Charles Huber Law. Charles H. Huber is a seasoned bankruptcy attorney with over thirty years of experience successfully representing bankruptcy filers. Get in touch with us to get the counsel you need.