More details to this question:
Debtor received last $200 payment from buyer of his car and transferred the title about 1 week before filing bankruptcy. The car was worth $1700, total sale was $1,800. Is this okay?
8 ANSWERS
Derek W. Freeman
It depends on whether this was an arms-length transaction. If it was a transaction between family members, the assumption is that it was not arms-length, and such a transaction can be challenged. Otherwise, as long as the debtor disclosed the transfer, it is perfectly legal. The debtor will also need to disclose how s/he spent the money, if asked by the trustee.
Answered on Oct 07th, 2014 at 1:15 PM
It would have helped if you had indicated whether or not there was any relationship between the debtor and the party buying the vehicle. In a sale to a neutral private party or dealer, this might not be any problem at all, but if the sale was to someone related to the debtor, it could have serious consequences.
Answered on Oct 01st, 2014 at 2:13 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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I'm not clear on exactly what transpired from your description. Debtors are not allowed to make gifts or sell items for less than fair market value before a bankruptcy.
Answered on Sep 30th, 2014 at 5:14 PM
No problem with good faith transfers like the one you described. Chapter 7 Trustee will ask you what you spent the money on, and may require proof that you spent the money before your filed your BK. Did you get the advice of counsel before doing this transfer, or are you just rolling the dice?
Answered on Sep 30th, 2014 at 12:09 PM
As long as you disclose it, the sale you described should not be a problem.
Answered on Sep 30th, 2014 at 12:09 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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Without knowing more, it seems proper to me.
Answered on Sep 30th, 2014 at 10:46 AM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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Yes, although all transfers in the 90 days prior to a bankruptcy can be challenged. It sounds like the exchange was for equivalent value so you should be fine.
Answered on Sep 30th, 2014 at 9:16 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Normally yes, the car was sold for market value.
Answered on Sep 30th, 2014 at 9:16 AM