Gift-giving, including selling something for much less than it’s worth, can be a problem in a latter bankruptcy. But usually it’s not. Most people filing bankruptcy have neither a need nor the desire to hide anything from their creditors. There’s no need because most people’s assets are already protected through state and federal laws. There’s no desire because most … Read More
Giving a gift, or selling for less than true value, can cause problems when done before bankruptcy, but usually only if the amount is large.
If you owe “priority” debts like income taxes and/or support payments, you may be able to pay no more while protecting a transferee.
Overall, Chapter 13 can be more powerful and more flexible than Chapter 7. That often also applies to a fraudulent transfer.
Selling or giving away something innocently, without trying to hurt your creditors, could still give the trustee the right to get it back.
Selling or giving away something to prevent your creditors from getting it may make a certain amount of sense but could be very dangerous.
“Fraudulent transfers” have similarities to “preferences.” They are both worth understanding because they can cause unnecessary hassles.
Which assets that you sell or give away before filing bankruptcy will be a problem, and which won’t?
Your assets can include property and possessions that you have sold or given away before filing bankruptcy.
Gift-giving, or selling for much less than actual value, can cause problems ahead of bankruptcy, but only if it’s a large gift.
Don’t get caught up in a “fraudulent transfer.” It’s easier than you might think to do so, because it doesn’t take fraudulent intent.
By filing your bankruptcy after applying appropriate asset management strategies, you can save your assets and pay the right creditors.
Gift-giving and gift-getting have a dangerous twist during the holiday season, if you, or your gift-giver, is in financial trouble.