Can I Transfer Property to a Family Member Before Filing for Bankruptcy?
Not every asset transfer before filing for bankruptcy in South Carolina is illegal, though even certain good-faith transfers over the past few years may be considered fraudulent. The experienced Columbia bankruptcy lawyers at Reed Law Firm, P.A., might review any proposed transactions to determine the best path forward in your case. Confidentially call (803) 726-4888 or contact our liquidation team online today.
Understanding Fraudulent Pre-Bankruptcy Property Transfers
Generally, you have the legal right to freely transfer your property in South Carolina. However, doing so in anticipation of bankruptcy might trigger certain red flags. At minimum, you must report to the trustee any property transfers made two years before filing for bankruptcy, and sometimes the time period could be longer. This is called a ‘look-back’ period, and it includes transfers to family members. If you intended to unlawfully avoid paying creditors with the transfer, the court has the right to retrieve these assets from your family member.
Fraudulent transfers include those made to avoid liquidation and those showing preferential treatment to family members, such as transferring bonds to your father to repay an outstanding personal loan. Such transfers may be retrieved directly from your family member, and the court could go after him or her for the value of the asset. It’s also generally fraudulent to transfer the asset in name only to avoid potential liquidation. This would include putting the car in your wife’s name while you continue using the vehicle. Trustees might also review any transfers made for less than market value.
Protecting Valuable and Sentimental Property During Columbia, S.C. Bankruptcy Proceedings
You have legal options for protecting sentimental and valuable property both before and after filing for bankruptcy in South Carolina. An experienced debt relief lawyer will consider your financial goals and help you choose the right type of bankruptcy in your case. Options for protecting assets include the following:
Chapter 13 (Wage-Earner’s Bankruptcy)
If you earn a fair wage, you might be able to keep your personal property, home, and vehicle by filing for Chapter 13 bankruptcy. Chapter 13 proceedings restructure your eligible debts into a manageable 3-to-5-year repayment plan. Any balance remaining after the payment plan period ends is discharged without the need to liquidate your property.
Chapter 7 Exemptions in South Carolina
Bankruptcy courts want to help you rebuild your life, which is why you are permitted to keep certain assets even during liquidation proceedings. Exempt assets include the following:
- Portion of your home equity
- Some equity in your vehicle
- Up to $6,100 in household furnishings, clothes, appliances, books, and pets
- Retirement accounts
- Government payouts
- Some jewelry
- South Carolina wildcard (S.C. Code § 15-41-30(A)(2))
Do not transfer any assets before discussing your rights with a dedicated Columbia bankruptcy lawyer.
Columbia, S.C. Bankruptcy Asset Protection Attorneys
It’s not uncommon to wonder whether it’s best to transfer assets into the name of a family member to avoid losing them during liquidation proceedings, but this is not legal in many circumstances. It might also create significant problems for your loved one.
Discuss protecting valuable assets before filing for bankruptcy in South Carolina with the dedicated Columbia legal team at Reed Law Firm, P.A. by calling (803) 726-4888 or connecting with us online.
