Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

Can I give away property before I file for bankruptcy in New York?

For New Yorkers thinking about a bankruptcy filing, it’s tempting.  You have a very valuable asset, perhaps some land or art or a car, and you don’t want to risk losing it to creditors.  So you give it away to your brother, a friend, one of your children.

Is this kosher under the bankruptcy laws?

No, this is not okay.  And attempting to transfer assets to someone for the specific purpose of trying to avoid losing it in bankruptcy is a violation of the bankruptcy laws known as “fraudulent conveyance.”  The bankruptcy law prohibits any actions with “an intent to hinder, delay or defraud creditors,” and doing so is considered grounds for denying a discharge.

Also, under federal bankruptcy law trustees can undo transfers made within two years of filing, and under New York law trustees can do so within six years of filing. As a result, a debtor can end up with what I call a “double no”–no discharge and no property.

If you’re feeling confused and not sure whether you can transfer something, ask yourself whether you’re giving it away (or selling it for a low price) in the hopes that creditors won’t be able to get it.  If you can’t answer “no” with a straight face, then you most likely should not make the transfer.

Additionally, if you’re working with an experienced New York bankruptcy attorney, they may be able to help you figure out how to keep the asset.  There are exemptions for cars and arts and you can even get a”wildcard” exemption.  Of course, these are things that you need to discuss with your bankruptcy attorney.  So before you make a move, find an attorney you trust and have a frank and open chat about your situation.  Ask all the questions that need to be asked.  And you may be surprised.

The bankruptcy laws were put in place to help debtors, and a good New York bankruptcy lawyer knows how to ensure that debtors get the maximum protection afforded to them by the bankruptcy laws.

Please feel free to contact experienced Business Bankruptcy Lawyer Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top