I transferred property out of my name, and now I am wondering if now is a good time to file. Should I wait to file bankruptcy?
If you transferred any property out of your name prior to filing for bankruptcy,
the bankruptcy trustee may be able to avoid the transfer and get the
property back for the benefit of your creditors. If you intended to
defraud your creditors by making the transfer, the court may deny your
bankruptcy discharge altogether.
What happens when you transfer property prior to filing for bankruptcy depend on:
the bankruptcy trustee discovers that you transferred property out of
your name within one year of your bankruptcy filing with the intention
of defrauding, hindering, or delaying your creditors, he or she has
grounds to object to your bankruptcy discharge. The trustee also has
grounds to object if you destroyed, harmed, or hid your assets. As a
result, it is never a good idea to transfer or conceal property in an
attempt to defraud your creditors before filing for bankruptcy.
(Learn more about what the bankruptcy trustee does in your case.)
if the bankruptcy trustee can’t object to your discharge on the above
grounds, he or she may be able to recover an asset you transferred out
of your name if:
This means that even if you
transferred the property more than one year prior to your bankruptcy,
under the above circumstances, a Chapter 7 trustee could still get the
property back, liquidate it (if it is not exempt), and distribute the
proceeds to your creditors. However, keep in mind that if you
transferred an asset with no equity or if you can exempt it in your
bankruptcy, the trustee will normally not seek to avoid the transfer.
you made a transfer that may put you in danger of losing your discharge
or allowing the trustee to get the property back, consider delaying
your bankruptcy long enough to protect yourself from these negative
consequences. However, remember that no matter how long you intend to
delay filing, committing bankruptcy fraud is a serious offense that can
land you in a lot of trouble and may result in criminal prosecution.
For more articles on when to file your bankruptcy petition, see Timing Your Bankruptcy Filing.
by: Baran Bulkat, Attorney
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