Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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Unfortunately, the transfer of property to the LLC could be considered a fraudulent conveyance and set aside in a bankruptcy.
Here is why.
A transfer of the debtor’s assets to a third party, with the intent to prevent creditors from reaching the assets to satisfy their claims, is called a “fraudulent conveyance”. Bankruptcy Code §548 provides for the avoidance of fraudulent transfers within two years before the bankruptcy filing date. Transfers to self settled trusts and similar devices are subject to a longer avoidance reach back (10 years). Bankruptcy Code §548 is attached in full.
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By reading reply it sounds as though I could be guilty of fraud by putting into an LLC just for legal/financial protection?
Missouri does not recognize deficiency judgments. This means that after the lender sells your real estate in a foreclosure sale, the lender cannot collect the any further monies to satisfy the debt.
Chapter 443.327 Missouri Revised Statutes contains Missouri’s liberal anti-deficiency laws.
I hope that the information which I provided was helpful to you.