Many people think that they will lose their property when they file for bankruptcy so they start to do things like transfer car titles out of their names and close financial accounts in preparation of filing for bankruptcy. This could be a huge mistake.
A trustee is assigned to each case. The trustee is not the judge, the trustee represents the creditors’ best interests and it’s their job to review your case to ensure that you are indeed entitled to the relief. The trustee will also review the information you provide in your pleadings and ensure it is true and accurate.
You must disclose the transfer of all property, other than property transferred in the ordinary course of business of financial affairs, for the two years prior to your filing. Property and assets transferred to a self-settled trust or similar device of which you are a beneficiary of must be disclosed for the ten-year span prior to filing.
With respect to bank accounts, you must disclose all accounts closed within a year prior to filing. However, sometimes certain funds held in certain accounts could be protected in your bankruptcy. Once you transfer those funds to cash, they could lose that protection.
Furthermore, payments of $600 or more made to one single creditor are considered preferential payments and the trustee can actually order those be turned over to the bankruptcy estate.
Not only will trying to conceal assets and property more than likely be discovered by the trustee, but it could also lead to federal criminal charges and you being denied your Discharge (relief from your debt). You need a fresh start at this time in your life, not the threat of being discovered and the stress associated with hiding assets.
Nonetheless, you don’t want to give up your assets and property of course. That is why it is so important to discuss your situation with an experienced bankruptcy attorney before you do anything. Your initial consultation with our office is free and we take the time to assess your situation and carefully determine what your options are. The majority of the time, our office can find an applicable law to protect your property and still get you the fresh start that you deserve.
If you are worrying about your property and assets prior to filing for bankruptcy,schedule your free consultation and get the professional advice of an attorney. There are a lot of misconceptions out there and you need sound advice in order to avoid creating a larger problem for yourself.