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The transfers may not be helpful. TheTrustee in bankruptcy has the power to set aside certain transfers made prior to filing bankrupcy called "fraudulent conveyances".
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 to the end of this post.
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I was told by our accountant that we need to have our mother to avoid bankruptcy since she has many promisorry notes to each of the partners and others .These were meant to be gifts but since they were beyond the 12 grand per year her accountant had us sign promisorry notes;we were all told that we would never have to pay them back as they were only done for tax reasons. She has forgiven all she legally can and according to the accountant ,if this land deal turns out as sour as it seems it will and she files bankruptcy then those promisorry notes will have to be paid back.Unfortunately our spouses signed the promisorry notes as well. I am the only one in the group who has the means to pay most of my promisorry notes back as everyone has lost these monies.Is there anything I can do to protect myself assuming the land deal collapses and as far as overal,our mother does not want to burden us and does not want the promisorry notes repaid.She is 80 years old. With all this in mind should she do all in her power to avoid bankruptcy ?
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