Questions about Property Transfer Laws
I gifted (quit claimed) the deed to my home to my son for estate planning purposes. Is the property transfer exempt under bankruptcy code 548 if I file a chapter 7?Under the Bankruptcy Code’s Fraudulent Transfers and Obligations Section 548 the property transfer may be exempt. However, under your state’s Fraudulent Transfer Act the property transfer my not be exempt. Your state may have more than a 2 year look bank period. This could be used by the trustee and/or creditors to cancel the quit claim deed to your son.
In Ohio, how much time do I need to let go from when I transfer personal assets before filing for bankruptcy?There is such a thing as a fraudulent transfer. Bankruptcy trustees are given the power to set aside or “void” certain transfers of the individual’s assets. Assets in question would be those that are unfairly placed beyond the reach of creditors. Property or asset transfer to a third party with intent to prevent creditors from accessing the property or assets is called a fraudulent conveyance or fraudulent transfer of property / assets.
There are two types of fraudulent transfers in bankruptcy law. The first is actual fraud. This involves the intent to defraud creditors. The second is constructive fraud. This involves a transfer which is made in exchange for out of the realm of consideration.
For your situation, actual fraud is committed when a transfer of property or transfer of assets is made within one year before the date of the filing of a bankruptcy petition. Timing of the transfer will be important in determining whether the transfer will stand and stay as a transfer. If it does not stand, and is deemed fraudulent, the trustee may try to recover the property or the value of the property.
Creditors that suspect the fraudulent transfer of property may be able to get a temporary restraining order and injunction to stop the transfer before it happens.
I transferred some of my cash assets to my wife via a brokerage account. Can I declare bankruptcy without involving my wife and that money?You are allowed to file for bankruptcy protection separately. Generally speaking your wife will not be directly affected. Her separate assets will be safe. However the transfer of assets may not be safe depending on the situation in which you gave her the money. If it is deemed as a fraudulent transfer of assets by the bankruptcy trustee (gave it to her to hide it from creditors) then the transfer could be reversed.
I quit claim deeded land to my wife 10 months before I filed for bankruptcy. I have disclosed this to my attorney. What does my bankruptcy and the transfer of this property 10 months before set me up for?The bankruptcy trustee will likely consider this as a fraudulent transfer and reverse the property transfer from your wife back to you. You can still continue with your bankruptcy. If the deed was never recorded then you could even just have your wife tear it up. Then you could amend your bankruptcy to include the property.
I put my house and all my personal property in my wife’s irrevocable trust 14 months ago. I then filed bankruptcy 6 months later. Will the transfer of property stand?Bankruptcy petitions require any transfers of property that took place less than two years to be reported. So if you wait longer than 2 years from the time you transferred your property then you will not have to list the transfer of property on the Bankruptcy Statement of Financial Affairs. However, the trustee’s avoidance powers go back to the amount of time that your state law allows. This differs from state to state. For instance, in Utah, creditors may go back further than 2 years to cancel transfers of assets. So that would mean the trustee could go as far back as the Utah laws allow him/her.
Having the right information and understanding of property transfer laws can help when dealing with questions regarding the transfer of property. Experts can help answer questions about bankruptcy and transfer of property or what a fraudulent transfer of property is.