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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Under Calif law can the proceeds from the sale of real property

Resolved Question:

Under Calif law can the proceeds from the sale of real property and/or common stock holdings be converted to the purchase of a "homestead" prior to filing bankrupcty? If so, is there a recommended "time frame" from the date of the sale to the date of the BK filing to avoid a "fraudulent transfer" accusation/presumption?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
Any Bankruptcy filer is allowed to engage in "pre-Bankruptcy planning", whereby the debtor can turn non-exempt assets into exempt assets, including purchasing a homestead. This would not be considered a "fraudulent transfer" or a "preference", as the non-exempt assets - such as real property and/or stocks - are not being transfered to someone else. Therefore there would be no "look-back" period, and the debtor can purchase the exempt asset(s) - such as a homestead - at any time before filing a Bankruptcy.
This is so in all states - including California - as Bankruptcy is a federal program.

I think this is what you wanted to know. If not, please let me know.
Thank you.
Customer: replied 5 years ago.
Is title to such a homestead required to be held in the filer individual's name or can it be held in a trust or corporation in which the filer is 100% (or less) Benefiary or shareholder?
Can such a trust or corporation be foreign i.e. Mexico?
Expert:  cfortunato replied 5 years ago.
The homestead exemption will not apply to any residence that is not directly owned by the Bankruptcy debtor (filer), even if the debtor is the main beneficiary of the trust, or if the debtor is the main shareholder of the corporation that owns the house. California Code. of Civ Proc. 703.020.
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