Can you sell your property prior to filing bankruptcy?
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Can you sell your property prior to filing bankruptcy?
My husband is 72 and I am 63. We are in debt for my daughter’s home, car, and personal loans. We bought everything in our names and can no longer afford the $1,600 a month payments we have been making for the last 2 years for her. Her husband often doesn’t work and won’t repay the money. I own my home and I need to know how I can file bankruptcy or what to do so I don’t lose my home and land. Can I sign my property over to my son? Or sell it to him? I don’t know what to do.
Asked on September 26, 2011 under Bankruptcy Law, Oklahoma
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Transfers made shortly prior to filing bankruptcy--whether of money, real estate, or other assets--are often voidable; they can be set aside as transactions made to defraud creditors. This is particulary so if the transfer is 1) not an arms length transaction--so it's not made between strangers, but rather with familhy members; 2) the transfer is for less than market value (so signing a home over to a child); and/or 3) the transfer is just "on paper" in that the person(s) transfering the assets continue to use it (e.g. you keep living in the home). Therefore, it seems very likely that you would not be able to do this. However, you should consult with an attorney, who can explore your options with you--including possibly suing your daughter and her husband since they have defaulted on your obligations to you and put into this position.
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