Can I Take My Name Off Titles and then File a Florida Bankruptcy?
When considering filing for bankruptcy, you should be aware of pre-filing mistakes that can be tempting. You should always be careful about taking your name off or transferring title to your assets before filing for bankruptcy, especially to “insiders”, which are close friends or family members.
The reason is that courts will closely scrutinize these types of transfers to determine if they are fraudulent, or made with the intent to frustrate the claims of creditors. If so, the transfer may be set aside by the court.
The basic rule is this: If the debtor transfers property, which includes money, to an insider within one year of filing for bankruptcy, the transfer may be set aside as an insider transaction. The transaction would be considered “preferential” by the bankruptcy code, meaning that it was for the benefit of the insider and to the detriment of the other creditors. If you transfer property or payback money to insiders to the detriment of your other creditors, the bankruptcy Trustee can file an action against the person who the transfer was made to in order to recover the asset(s).
The sort of behavior would be considered questionable by the court and possibly even fraudulent, and could result in the denial of your discharge. Moreover, if a debtor transfers ownership of any asset, including real estate, cars or certificates of deposit, for the purpose of frustrating the valid claims of creditors, the Trustee can file an action to “avoid the transfer”.
The bottom line is that those considering filing for bankruptcy should be very careful about transferring assets, taking their name off assets and repaying loans to friends or family members. These kinds of actions could lead to much bigger problems down the road for the debtor and for the people to whom the transfers were made. It is also important to know what property is exempt in Florida and therefore not subject to being taken by creditors.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
