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.
1 Answer from Attorneys
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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