Bankruptcy and the Transferring of Assets

: Reese Baker & Associates

  Filed under: Filing bankruptcy

transfer, assets, before filing, bankruptcy, bankrupt, bankruptcy attorney Houston, Texas, lawyer,When the possibility of having to seek bankruptcy protection becomes a reality for some individuals, the first thought is to figure out a way saving some of the assets that they have accumulated over the course of time. The want to protect your assets in bankruptcy is a natural feeling; however without the assistance of a bankruptcy attorney in Texas, you run the risk of making an illegal transfer if you do so right before bankruptcy.

Many think that by simply transferring those assets to a family member or close friend before the proceedings will allow them to keep those things hidden from the courts and the trustee. This mindset can lead to all kinds of bad things happening including having the bankruptcy petition fully denied by the courts. In some cases, if the property has been transferred in the past year leading up to bankruptcy, the trustee can try to reclaim the property and deny your bankruptcy claim.

You have a car or truck that you own and that still has residual value and you simply “gift” it to a family member or friend, or a piece of property that you transfer the title to in order to not have it on the balance sheet when the proceedings begin. Both of these types of transfers can land you in hot water with the courts. The same as if you “sold” the vehicle or property to someone for less than the true market value before filing for bankruptcy can also be problematic. The criteria for determining if the asset transfer is illegal consist of how long ago it was sold, the assets market value, if the property could be considered exempt.

Before you do any of these types of transfers or pay off a loan from a family member or someone close to you rather than an outside creditor you should speak to a qualified bankruptcy attorney. Houston, TX has rules and exemptions that a Texas bankruptcy lawyer can use to aggressively protect your property and can help make absolutely certain that you are not in danger of circumventing any of the rules of the bankruptcy proceeding. Knowing what you can and cannot do will lead to a much clearer picture and save you from making a serious error that could come back to haunt you down the road.