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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2863
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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IF I SOLD PROPERTY TO OUR SON A YEAR AGO FOR THE AMOUNT OWED

Customer Question

IF I SOLD PROPERTY TO OUR SON A YEAR AGO FOR THE AMOUNT OWED ON THE LOAN CAN I FILE CHAPTER 7 .THE REASON FOR THE SALE WAS TRYING TO AVOID CHAPTER7.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 5 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

Couple of things.

Terry L. :

First, you would have to disclose the sale in the statement of financial affairs on the petition for two years from the sale.

Terry L. :

you have to list all sales in the 2 years leading up to the case.

Terry L. :

Second, the issue becomes - what was the property worth when you sold it?

Terry L. :

You said you sold it for the balance owed. If the value was greater, then that's where the problem would come in a chapter 7

Terry L. :

Since you sold it to family, that is an insider transaction according to the court.

Terry L. :

The difference between the value and the sale price could be pursued by the trustee.

Terry L. :

The trustee has the power to avoid the preferential sale to your son, to go get the difference to pay your creditors.

Terry L. :

If the amount is not that great, then the likelihood of that happening would diminish.

Terry L. :

The trustee would factor in the amount of debt, the amount of estimated recovery, and the estimated amounts of cost to recover that amount

Terry L. :

So, to prevent that, you may want to look at a chapter 13 - which can pay back enough debts to protect that transfer.

Terry L. :

Do you have any questions?

JACUSTOMER-u8vog9pk- :

THANKYOU

Terry L. :

If you do, let me know, best of luck. please click accept so I can get credit for answering.

Terry L. :

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