Some people, before filing bankruptcy, try to hide certain assets or pass them to family members to prevent liquidation. The court is on the lookout for this and can potentially clawback or void these transactions. A St. Louis Chapter 7 Attorney can examine any transactions you may have recently had to identify potential instances of fraud. If these are found by the trustee, it could cause problems with your filing.
A trustee will look for certain things in your history to identify potential abuse or fraudulent transfers. These include:
- Any transfer made within the last 2 years
- Whether there was an attempt to delay, hinder, or defraud creditors
- Whether you received less than fair market value for the property while you were insolvent or were made insolvent because of the transfer
For instance, say a person had a 2 year old car worth $17,000. Six months before filing, they sold this car to their brother for $1,000. Because this was so close to the filing and because the value was so much less than the fair market value, it could be deemed a fraudulent transfer and voided by the bankruptcy trustee. If this happens, it could result in the vehicle being liquidated to pay back creditors.
A St. Louis Chapter 7 Attorney can answer questions you may have about property recently sold or transferred. By identifying problems before you file, you can prevent problems that could cause your Chapter 7 filing to be dismissed by the trustee.
At Westbrook Law Group, we can help with your bankruptcy filing and prevent potential problems. We understand how stressful overwhelming debt can be and we will work to give you a fresh start. To speak with a bankruptcy lawyer, contact Westbrook Law Group today for a free consultation.