Never, ever transfer an asset prior to filing bankruptcy – or definitely not before talking to me. Transferring the title to your Harley to your cousin Mike or your boat to your best friend Bob does not protect the asset from the trustee. Likely, you made it impossible for me to help you keep it.
Sometimes it is referred to as a “fraudulent conveyance”. This can me one of two things, or both. First, a debtor intended to defraud creditors; or second, the debtor received less than fair value for the asset.
Is your Harley worth $10,000? You can’t sell it to cousin Mike for $5,000. Boat worth $7,000? Can’t sell it to Bob for $2,000.
You are allowed certain exemptions in bankruptcy, and there are factors to consider in determining how much in exemptions you have in Florida. But if you transferred an asset prior to filing, I generally cannot protect it all – because I cannot exempt something that you no longer own.
If you must transfer an asset, because you need the money. Then the more documentation and proof the better. Hopefully, you sold the asset for fair market value, or as close as you could get to fair market value. Put the money you received into the bank so that you can show how you spent the money on necessary items.
This can be a proper way to dispose of valuable assets prior to filing a bankruptcy. But make sure you discuss a transfer with me before going through with it.
I have seen and heard things at the meeting of creditors. Usually funny for others listening, but not funny at all for the person who is answering the trustee’s questions.
The bankruptcy petition requires that you list all transfers of property, other than in the course of ordinary business, within the last two years prior to filing the petition. Also, any property transferred to self-settled trust within the last ten years must be disclosed.
Call 407-749-0080 now for a free consultation to see how I may be able to help you with proper exemption planning.