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Fraudulent Transfer before bankruptcy?

Additional Information:

I had always intended on transferring all or part of my Newton home to my only daughter as sort of an estate planning thing but I never got around to it. I am now filing for bankruptcy and do not want to make matters worse.

ATTORNEY ANSWER:

You should definitely not make any transfers of real property prior to filing bankruptcy without first talking to an experience attorney. The problem is that, regardless of what you were thinking about doing, if you transfer the home within a year of filing your bankruptcy petition that will certainly raise red flags.  The bankruptcy code (11 U.S.C. Section 727(a)(2)(A) has this to say about fraudulent transfers: “[t]he court shall grant the debtor a discharge, unless . . . the debtor, with intent to hinder, delay, or defraud a creditor . . . has transferred, removed, destroyed, mutilated, or concealed . . . property of the debtor, within one year before the date of filing of the petition.”

In your case, the key issue of intent may be debatable, but regardless you will have to convince the court that your motives are pure.  Depending on your situation, you may not have to lose the house and your plan to transfer the house now may be unnecessary.

You should consult with a competent Massachusetts bankruptcy attorney to develop a strategy to protect your assets, minimize any negative exposure and provide you with a clear field to pursue your estate planning goals.

The Newton Bankruptcy Lawyers  at Esher-Rossi concentrate their practice in bankruptcy and insolvency matters.  Our lawyers serve consumers and businesses throughout the state of Massachusetts with offices located in downtown Boston, the Boston Metrowest town of Framingham, and  Provincetown, Cape Cod.

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