Can I sell my second car to a family member but use it like I own it while filing for bankruptcy?
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Can I sell my second car to a family member but use it like I own it while filing for bankruptcy?
And can I sell a small second property to a family member and collect rent for my own income?
Asked on July 30, 2014 under Bankruptcy Law, Colorado
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
You may sell property (real or personal) IF the sale is for fair market value--i.e. you'r not giving them a "friends and family" discount--and also if it is a "true" sale--that is, you're not transferring it in name only while continuing to collect income from it or continuing to use it as if it were your own. The two scenarios you describe, in which you "sell" a car still make full use "like I own it," or sell a property but then, even though you no longer own it, collect the rent on it. would likely be seen as fraud on the court and creditors, and would very likely not only be disallowed, but could harm your overall filing or subject you to penalties or sanctions for such fraud.
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