Why Does My Bankruptcy Lawyer Care If I Have Given Things Or Sold Things To My Family ?

Posted on May 13, 2010. Filed under: Uncategorized |

Your lawyer cares about these things because the bankruptcy court and trustee care about these things when you file bankruptcy. In fact, if you have sold or given away anything to family members recently, you are required to tell about that in your bankruptcy petition and related forms, which you will file to also tell the court, creditors and trustee about what you own and what you owe.

It is possible that the bankruptcy trustee may seek to have the transfer to the family member voided or set aside so the trustee can sell that item to pay your creditors. The trustee is required to consider that and there is an incentive for him to look for such transfers to set aside, as he may be able to receive a commission, or fee, on whatever he can collect to pay creditors. If it was money that was given to the family member, and you were paying back that family member money you owed them, then the trustee may ask for that money back from the family member.

But, don’t panic ! Whether the trustee will ask for money or things back that you have given or sold to family members, depends on several factors. One of those is how recently the item was sold or given to the family member. Another factor is whether the item had a lien on it from a bank, for example, and whether that lien was paid or not. Still another would be whether the item was sold to the family member for fair market value, or was a special discounted price given to the family member. Also, it is possible that the value of the item given or amount of money paid back is so low that the trustee may not bother with going after it.

Without fail, always, always, tell your bankruptcy attorney about any such things that you may have sold, given away, or paid back to family. If your attorney knows about these transfers before you file, then he may be able to help you or your family member avoid losing the item or money to the trustee.

John Rogers, Kentucky Bankruptcy Attorney

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