Minnesota Bankruptcy Lawyers at Behm Law Group Ltd.
If you wish to keep your friends and family members in your good graces, don’t attempt to transfer property to them if you anticipate filing for bankruptcy within the next two years and they don’t pay you a reasonable market value for the property. Embarking on such a path may be considered fraudulent and could result in your friends or relatives being sued to give up that undervalued property. They’d be out whatever money they paid you plus the property they thought was theirs.
According to 11 U.S.C. Sec. 548, a bankruptcy trustee can sue individuals who purchased property, such as a vehicle, from the debtor who received substantially less than equivalent return value. Therefore, if a debtor sold a vehicle or similar property worth, say, $15,000, to a friend or family member, but only received $3,000 in compensation, and that transfer took place within two years before the debtor filed bankruptcy, the trustee could sue to reclaim that property in order to sell it for a more accurate market value. The trustee would then take that increased capital and distribute it evenly among the debtor’s affected creditors.
To avoid this potentially embarrassing fraudulent transfer situation, make sure you enter into financial agreements with friends or relatives by asking for a reasonable market value. This is especially important if you’re selling property when you’re under extreme financial duress that could lead to a bankruptcy filing in the near future.
The Bankruptcy Code can be extremely difficult to understand, especially when delving into the more arcane language and clauses that are best left to bankruptcy law professionals. Behm Law Group Ltd. serves Mankato, MN, and surrounding communities, and our bankruptcy expertise is at your disposal to help you successfully emerge from the stressful experience of filing for bankruptcy protection.
To better navigate this somewhat obscure bankruptcy side road, our professional team of bankruptcy attorneys at Behm Law Group Ltd. is available to assist and advise you. Contact Behm Law Group Ltd. today and begin your personal journey out of debt.