The biggest mistake a debtor can make right before filing for Chapter 7 or Chapter 13 Bankruptcy is transfer a car or real estate title out of his or her name. It is wrong to assume that if you transfer a property out of your name, your property is now safe from the reach of bankruptcy trustee and creditors. BIG MISTAKE!
Putting properties in the names of family and friends will expose them to lawsuit to recovery the properties. You can also jeopardize your bankruptcy discharge because it is an action taken to "hinder, delay or defraud" creditors. 11 U.S.C. 727.
Usually the bankruptcy trustee or creditors will request a return of the asset or money judgment in the amount of its value. The Bankruptcy Code gives bankruptcy trustee the power to undo any fraudulent transfer within the last 2 years. 11 U.S.C. 548. Moreover, the bankruptcy trustee can utilize state law protection of creditors' rights to recover any fraudulently transferred property, which is 4 years in California.
To sum it up: Do not put assets in someone's else name.
If you want to keep your asset and you are worried that the Chapter 7 Bankruptcy Trustee might liquidate it to repay your debt, consider filing a Chapter 13 Bankruptcy. Schedule a consultation at the Sacramento, Stockton, and Fairfield CA Bankruptcy Attorney Office to discuss how you can keep your asset in bankruptcy. Muoi Chea is an experienced bankruptcy attorney will explain your options under Chapter 7 and 13 Bankruptcy and determine if bankruptcy is right for you. She will not recommend bankruptcy if your asset is in danger.