Once the bankruptcy case is filed an "automatic stay" will go into effect to protect you from any judgments, pending judgments, foreclosures or any other collection activity sought by a creditor on a debt owed prior to filing the bankruptcy case. This stay is federal protection of your assets from foreclosure, repossession or any other seizure.
Also, if you transfer to property into the trust in close proximity to the filing of the bankruptcy case, the bankruptcy trustee may reverse the transfer and ask that the property be brought back into the bankruptcy estate.
Some people attempt to protect their assets from creditors by transferring some of their property into a trust because creditors would then have a harder time collecting on these assets. However, your trustee can stop you from collecting the interest on properties protected by trusts made within 10 years of your bankruptcy filing if you assigned a portion of them to a self-settled trust. Your trustee can also stop you from collecting interest on assets protected by a trust if you are deliberately trying to interfere with or defraud any creditors and with the bankruptcy law reform in effect (as of Oct./2005), creditors may more easily be able to gain access to these assets transferred in close proximity to the bankruptcy case filing.
Real estate trusts and bankruptcy are often a toxic mix. If you intend to maintain the right to terminate the trust and transfer the trust asset (the house) to anyone you want- including herself, then it could create a problem in the bankruptcy. Such a power would make the trust property subject to claims of your creditors because you would still be considered the true owner.
If you are dead set on creating a trust to protect your assets, I would suggest consulting with a bankruptcy and trust attorney in your area to ensure that the type of trust created would not leave you vulnerable to your creditors during the course of the bankruptcy case. However, I would not suggest creating a trust in close proximity to a bankruptcy case filing in an effort to protect assets that could otherwise be protected in your bankruptcy case.
Again, I hope you found this information helpful.