Liquidating assets before bankruptcy Single maturewomenhookup com
This “actual intent” basically means that you gave away or sold the asset with the intent of keeping it—and keeping its value—away from your creditors.
But if two conditions are met, a “fraudulent transfer” does not actually need to be fraudulent, as odd as that may sound.
So if you have a garage sale and sell stuff for whatever people are willing to pay for it, or similarly sell other stuff on e Bay or Craigslist at a sensible price, those sales would NOT be subject to being “avoided” by a trustee, assuming you got “reasonably equivalent value” for whatever you sold.
Giving Away Worthless Stuff If after your garage sale you donated everything that didn’t sell to Goodwill or some other charity, that donation would not be a fraudulent transfer.
Many self-employed or small business owners facing financial difficulties and considering bankruptcy may decide to close up shop or sell the business to cut their losses and reduce stress.
But depending on when the business owner files for bankruptcy the simple action of selling or closing a business before filing for bankruptcy may be seen as fraud by the bankruptcy court.
Most Often, It’s Not a Good Idea Simply put, if you’re thinking about selling or giving away anything of value when you’re considering filing a bankruptcy case in the future, don’t do it without talking first to a knowledgeable bankruptcy attorney. If you’ve already sold or gave away something, tell your attorney about it at the beginning of your initial meeting with her. So, for example, not wanting that to happen you give your valuable gun collection to your brother, or sell a classic car for a lot less than it’s worth to your best friend’s sister. If you give away that asset, or sell it for less than fair market value, your bankruptcy trustee can in many circumstances reverse (“avoid”) that gift or sale as a “fraudulent transfer.” If so, the trustee would take back possession of the asset, sell it, and pay the proceeds to your creditors.For example, if you have a cleaning business and close shop a few months before filing bankruptcy by selling or "giving" the clients, equipment or contracts away to someone else, that action will be viewed as an asset transfer and could fall under the category of fraud. The business assets that you sold or gave away might have become property of the bankruptcy estate and might have been liquidated to repay creditors.If you "sell" or "giveaway" business assets before filing for bankruptcy the bankruptcy trustee may view your actions as a fraudulent attempt to prevent creditors from being repaid using those assets.With a revocable trust, the grantor has complete control over the assets until his or her death.As a result, the consumer (or trust beneficiary) doesn't have any legal claim to the trust assets.
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When a consumer is filing for bankruptcy and he or she is a potential beneficiary of a trust that has considerable assets, there are issues that need to be resolved before deciding whether it's likely the assets of the trust will be included in the bankruptcy liquidation.