Legal Question in Bankruptcy in Minnesota

If you file a chapter 9 or 7 and you have property turned over to someone else in the past 2 years is this counted? My son turned the property over to us because he owed 36,000.

Asked on 6/21/16, 10:31 am

1 Answer from Attorneys

David Kelly-952-544-6356 Kelly Law Office

Well, Chapter 9 is for municipalities, so I'll assume we are talking Chapter 7.

If your son owed you and gave you property to satisfy the debt, that's payment of a debt to an insider. If it happens within a year of filing, the bankruptcy trustee can claw if back from you. If your son waits a year from that transfer before filing, it's better but I would be worried about whether it would be considered a fraudulent transfer. That's what you have when somebody transfers something to a friend or relative to hide it from creditors. In Minnesota the fraudulent transfer law goes back six years.

If it looks like a fraudulent transfer, the trustee might still claw it back.

A Chapter 13 bankruptcy might be safer. Your son needs a lawyer who really knows what he or she is doing.

This response is not legal advice and is for general information purposes only.

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Answered on 6/21/16, 11:56 am

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