Failure to understand and disclose transfers is one of the most egregious errors an inattentive bankruptcy lawyer, or a debtor filing bankruptcy, can make. Failure to disclose transfers could lead to your bankruptcy discharge being denied (no debt relief) or could invite a lawsuit against the recipient of the transferred asset.
If you are considering filing for bankruptcy, take some time to identify any and all transfers and be sure to discuss them with your bankruptcy attorney. Occasionally, without consulting an attorney, a misguided debtor may intentionally or unintentionally transfer property to a relative or friend without being paid fair value. In Montana, a bankruptcy trustee can sue for fraudulent transfer if the debtor transfers money or property within four years before the bankruptcy filing date, even if the transfer was unintentional.
Transfers can include (but are not limited to):
- Creating a lien to secure a debt
- Changing a title holding
- Giving up legal rights to settle a dispute
- Trading in or selling a vehicle, house, car or stock
- Giving away stuff
- Levies and garnishments
- A divorce property settlement agreement
Not all of these types of transfers are problematic — this area of bankruptcy law is very fact specific and the law is complex. Dealing with transfers when filing bankruptcy can sometimes be tricky. An experienced bankruptcy lawyer will help you navigate the mine field to ensure a successful outcome. Be sure to speak with your bankruptcy lawyer before transferring assets or you may be making your situation worse.