Through Chapter 7 bankruptcy, you will have the opportunity to get rid of debts you owe; however, you may also lose some assets in the process. To avoid losing your assets, you may wonder if it would be alright for you to sell or give them away before you file. After all, this would eliminate you losing the items, right? Before you do this, there are a few important things you should know about giving away or selling assets prior to bankruptcy.
You Can Do This With Exempt Assets
One key difference with assets in bankruptcy is whether they are exempt or non-exempt. Any assets you own when you file bankruptcy will be classified one way or the other. Assets that are classified as exempt will be things you can keep and do with what you want. If assets are classified as non-exempt, the trustee will have the right to seize them from you. The trouble is knowing how your assets will be classified in your bankruptcy case without visiting a bankruptcy lawyer first.
This Process Is Often Labeled As Fraud
Bankruptcy courts are very strict with the way they handle cases, and a trustee will be assigned to your case to evaluate every aspect of it. If the trustee discovers that you recently sold or gave away assets that would have been classified as non-exempt, he or she is likely to view the case as fraud. Fraud is a very serious crime in bankruptcy cases, and there can be several outcomes if this happens.
The first is that the trustee might throw your case out. In other words, you would not be eligible to file at this time. The second thing is that the trustee might make you pay for the value of the assets you gave away or sold. Finally, you could be charged with the crime of fraud, and this could result in criminal charges.
There Is A Time-Frame To Understand
It's also important to understand that a bankruptcy trustee can look back one year or longer into your finances. The purpose of this is to see if you had any assets that you sold with the intent of avoiding the loss of these assets. In other words, if a trustee believes that you had sold or given away assets as a fraudulent event, you could end up in trouble.
Transferring assets out of your name for the sole purpose of not losing them to bankruptcy is a serious offense that you should avoid. If you have questions about this, contact a bankruptcy lawyer like David S. Riehl, Attorney At Law to set up an appointment.Share
13 April 2017
My name is Noni. When I was in college, I was hit by a car while crossing the street. My life was never in danger, but I did break a few bones and had a lot of huge medical bills. I was hoping I wouldn't have to get involved with an attorney, but unfortunately, it came down to that. I used a family friend who is an accident attorney to get some compensation. A few years later, I was hit while riding my bike and had to go through the same process. I suppose I'm lucky to be alive. And it's thanks to accident attorneys that I have been able to put my life back together. I started this blog as a way to let others know just how much lawyers can help you in certain situations.