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Unfortunately that could be the result. The deed would be considered to be a "preference" even though the debt is legitimate and would typically be set aside by the bankruptcy trustee.
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A transfer of the debtor’s assets to a creditor that results in a creditor receiving more than the creditor would have in a Chapter 7 bankruptcy, is typically considered a “preference". A security interest is considered a transfer. Bankruptcy Code §547 provides for the avoidance of preferential transfers within 90 days before the bankruptcy filing date for third parties. Transfers to insiders (including a relative) are subject to a longer avoidance reach back of one year. Bankruptcy Code §547 is attached in full:
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