Saturday July 29th 2023 What Happens if I Transfer Property Before Filing Bankruptcy?

Navigating the complexities of bankruptcy can be a challenge, especially when you're already dealing with the stress of financial hardship. As an experienced attorney, I, Omar Zambrano, am committed to helping families understand their options and make informed decisions. If you're facing layoffs, unemployment, or falling behind on payments, my team and I are here to help eliminate debt and provide a fresh start. We offer free consultations at 626-338-5505.

One question that often arises in our consultations is, "What happens if I transfer property before filing bankruptcy?" 

Bankruptcy is a legal tool designed to provide relief for individuals or businesses burdened with overwhelming debt. However, the process involves a detailed review of the debtor's assets, which may be used to repay creditors. This reality prompts some to consider transferring their property before filing bankruptcy in an attempt to protect their assets.

When you file for bankruptcy, a bankruptcy trustee is appointed to oversee your case. Their primary role is to manage the bankruptcy estate, which includes reviewing all property transfers made before the bankruptcy filing. If they suspect that a transfer was made to defraud creditors, they have the authority to reverse or "avoid" it.

Transferring property before filing bankruptcy can potentially be classified as a fraudulent transfer. This classification applies particularly if the transfer was made with the intent to hinder, delay, or defraud creditors. If a transfer is deemed fraudulent, the bankruptcy trustee has the power to undo the transfer and bring the property back into the bankruptcy estate.

The lookback period is a specific timeframe during which the bankruptcy trustee can examine property transfers. This period varies depending on the bankruptcy code and state laws, but it typically ranges from one to two years before the bankruptcy filing. Any transfers made during this period are subject to scrutiny.

If a bankruptcy trustee determines a fraudulent transfer has occurred, it can significantly impact your bankruptcy process. You may lose the ability to discharge your debts, or your bankruptcy case could be dismissed entirely. In severe cases, criminal charges may even be filed.

Transferring property before filing bankruptcy is a complex issue with potential legal ramifications. 

If you're facing financial hardship and considering bankruptcy, don't hesitate to reach out for a free consultation at 626-338-5505. My team and I are here to help you eliminate debt and regain control of your financial future.

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