Whether you are debating between a Debt settlement and bankruptcy filing or have decided to file bankruptcy but are worried about the effects it might have on your credit, you are bound to have many questions.
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The Bankruptcy Code gives you property exemptions, because it recognizes that in order for people to move forward after bankruptcy, people have basic needs. If a property is exempt, it can’t be used to pay your creditor’s claims.
Most of the assets that a typical Chapter 7 bankruptcy debtor owns are exempt under the federal and state exemption law. You may, however, own an asset whose market value far exceeds the amount allowed under the exemption law.
While some pre-bankruptcy planning may be allowed, putting property you own into someone else’s name to avoid it being taken by creditors or the trustee may be considered a avoidable transfer and can result in your discharge being denied. In addition, the trustee may be able to recover the property from the person to whom it was transferred.
The transfer of assets during the months and even years prior to the filing of a bankruptcy petition could constitute a “fradulent transfer” regardless of your subjective intent to defraud creditors, especially if the transfer was made to an ”insider” (e.g., family, relatives, or friends) for less than the fair market value of the property at a time when you were “insolvent” (or had other debts that you couldn’t repay).
If you have assets that you are contemplating to dispose of before filing bankruptcy, you should first
discuss your situation with a competent bankrutpcy attorney in your area.
The information contained on this site is for general education only and it is not, nor is it meant to be, legal advice. You should seek advice from a bankruptcy attorney for your specific situation.