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JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
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Experience:  Attorney in the practice of Bankruptcy Law since 1996
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My brother & I are car collectors and do retorations and have

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My brother & I are car collectors and do retorations and have trading cars over the years as "family transfers".

Can I give my brother a "project car" (1990 Porsche) before filing for bankruptcy without raising "red flags" such as dumping assets?'

Thank you, XXXXX XXXXX
Unlikely, unless you can support the contention that the transfer is in the ordinary course of business.

On the Statement of Financial Affairs, which is part of a bankruptcy petition, you have to list all transfers which have taken place in the past 2 years.

The trustee would certainly question a transfer of a car. If you could justify that this was a transfer in the ordinary course of business, you might be okay, but my guess is the trustee would seek to avoid the transfer if the car was very valuable.

If the trustee does try to go after the car, you can often settle with the trustee by paying them the value of the asset they are pursuing.

I recommend you consult with an attorney in your area who will be familiar with the disposition of the local trustees and also be able to advise you what type of settlement you could expect as a result of such a transfer - PRIOR to making any such transfers.

Good luck.

Joe

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