QUESTION
What can happen to a family member if a person filing bankruptcy transfers property into the family member''s name?
Asked on Nov 22nd, 2011 on Bankruptcy - Missouri
4 ANSWERS
Bankruptcy Attorney serving Burbank, CA
Partner at
Law Office of Mark J. Markus
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3 Awards
It depends on when the transfer is done and why. If it is done within 2 years prior to filing a bankruptcy case and the debtor (party filing the bankruptcy case) did not receive "reasonably equivalent value" for the transfer, then it is by definition a fraudulent transfer recoverable by a Trustee in bankruptcy (at least in a Chapter 7 bankruptcy case). State fraudulent transfer laws would also apply, so there may a longer lookback period (more than 2 years) under applicable state law.
If the transfer was done as repayment of a debt (meaning you owed $50,000 to your father, and transferred your house to him and it had $50,000 of equity in it at the time, then that would be considered a preferential transfer and that is also recoverable by the Trustee in bankruptcy if it occurs within one year prior to filing your bankruptcy case.
Mark Markus has been practicing exclusively bankruptcy law in California since 1991. He is a Certified Specialist in Bankruptcy Law by the State Bar of California Board of Legal Specialization, AV-Rated by martindale.com, and A+ rated by the Better Business Bureau.
Answered on Oct 31st, 2012 at 9:09 PM
William/J Joanis
It is possible that the person will only have to give the property back. But it is also possible that they could be sued for the value of the property. If that happens, and the property is later sold for less than the amount of the judgment (which is exceedingly likely, as sales of property to satisfy judgments don't net as much, usually, as the property is valued at during the determination of the value of the initial transfer). Of course there is the violation of federal law issue too. In either case,the debtor will probably not be getting invited to Thanksgiving dinner or Christmas dinner at the recipient's house.
Answered on Dec 08th, 2011 at 12:58 PM
Personal Injury Attorney serving Fall River, MA
at
Botelho & Associates, LLC
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Such a transfer would be considered a fraudulent transaction; which could have jail time as a penalty and the transfer could be attacked by the courts. generally there must be 2 years between the transfer and filing bankruptcy for it not to be considered fraud.
Joseph F. Botelho, Esq.
BOTELHO & ASSOCIATES, LLCAttorneys At Lawhttp://massachusettslawyeronline.com/
126 Shove Street Unit 202 Fall River, MA 02724
Office: 888-269-0688Cell: 508-801-6747FAX: 877-475-8147
Answered on Dec 05th, 2011 at 2:21 PM
3 Awards
A transfer of that kind ia a bad idea. If you transfer property into a family member's name in anticipation of bankruptcy it is considered fraud. You could be denied your discharge or even face jail time. The family member who receives the property can be sued by the bankruptcy trustee in order to retrieve the value of the property. If you have already made a transfer, it can usually be undone prior to filing. I suggest you meet with an attorney to review your options.
Answered on Nov 25th, 2011 at 1:04 PM