Tuesday, June 13, 2017
Can I Move Assets Before I File Bankruptcy?
Not everyone who files for bankruptcy relief is penniless, in fact many consumer filers have a significant amount of assets and it is just that their debt load far outweighs what they have on hand to pay those obligations. So filing bankruptcy might seem scary, because of the possibility that nonexempt assets could be seized and sold to pay off debt. When that is the case the question sometimes arises as to what protective actions can be taken before you file a case, in order to preserve your assets.
Moving assets before filing a bankruptcy case is prohibited. The types of movements that are not allowed include:
• Transferring title to a car, boat, recreational vehicle, or other motorized auto to a friend or family member. The prohibition in this regard is so strict that if you make a transaction of this type within you family in the one year prior to filing a case, the entire transaction can be undone.
• Moving funds from a domestic account to an international account.
• Selling property in order to avoid repayment through a bankruptcy plan is not allowed, especially when the sales proceeds were not applied to the account balance and you still have ready access to the item or items sold.
The type of pre-bankruptcy planning you engage in, and whether it is allowed, depends on the type of transaction and they type of property involved. The best rule of thumb to follow is to simply avoid any transfers or sales of assets before filing bankruptcy. However, if you have engaged in this type of activity, all is not lost. You can still file a case, but your case will be heavily scrutinized by the Court and Trustee. This is all the more reason to have a qualified bankruptcy and debt management attorney by your side and handling your case. We know what types of actions raise red flags, and can help you with getting your case filed if these flags arise in your situation. For more information about bankruptcy and what is prohibited prior to filing, call us today.
If you have questions about bankruptcy, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.