Can You Transfer Assets to Friends or Family Before Filing for Bankruptcy?

So, you want to file for bankruptcy but also have assets that may be at risk of being liquidated. Can you transfer those assets to a friend or relative to avoid this? In this article, we’ll discuss why you shouldn’t transfer assets before filing for bankruptcy and the repercussions you might face should you decide to do so anyway.

Your bankruptcy petition could be denied if you transfer assets before filing.

Bankruptcy shouldn’t be viewed as a route to take if you’re looking to avoid paying your creditors back. Instead, bankruptcy is reserved for individuals who have fallen into debt and cannot afford to dig themselves out of it.

Although bankruptcy has helped thousands of people gain a fresh start financially and relieve them from having to pay back some or all of their creditors, you shouldn’t use it to trick your creditors into thinking you have no money or assets to pay them back. By this, we mean transferring assets that could be liquidated to someone close to you who can protect them.

Former professional tennis player Boris Becker attempted to do this and found himself facing a lengthy jail sentence. After Becker filed for bankruptcy, it was later determined that he had hid nearly $3 million in assets and loans “to avoid paying debts,” reports the BBC (1).

In the event the bankruptcy court found out you did, in fact, transfer assets just before filing for bankruptcy, your petition could be thrown out, or worse, you could face criminal charges which might carry jail time and fines.

The transfer of money or assets can easily be discovered by a bankruptcy trustee.

When you file for bankruptcy, your case will be assigned to a trustee. This person will comb through all of your financial accounts and review the assets you own to determine what can be liquidated to repay creditors. It’s worth noting that you will also be required to disclose to the court and the trustee all of your assets, including cash, loans, etc.

If the trustee finds that you transferred money or there is no trace of an asset you recently had in your possession, it will likely raise some red flags.

Let a skilled St. Clair County, AL bankruptcy lawyer assist you through the process.

The bankruptcy process can be lengthy and confusing, and you wouldn’t want to make a mistake that could jeopardize your chances of getting your petition approved. Fortunately, the experienced St. Clair County, AL bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. are here to ensure this doesn’t happen.

If you’re considering filing for bankruptcy in Alabama and have pressing questions you’d like to discuss with a legal expert, contact Hill, Gossett, Kemp & Hufford, P.C. to schedule an initial consultation.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11