What not to do before filing for bankruptcy

People who file for bankruptcy in New York often worry about what assets might be seized after they file. Although some people may be tempted to transfer valuable assets to family members and friends in an effort to protect them, this activity could be viewed as fraud. A person filing for bankruptcy may actually have a better chance of protecting assets that are in their own name.

Many valuable assets, such as a home and a car, can be exempted from seizure during a bankruptcy filing. However, these assets can only be legally protected if they remain in the bankruptcy filer’s name. Changing titles on property or transferring funds from a bank account right before a bankruptcy filing could actually increase the risk that the property or funds will be seized.

In addition to keeping all assets in their own name, a person filing for bankruptcy must disclose any potential payments that they might receive in the future. Any pending lawsuits, including workers’ compensation claims, are considered assets during a bankruptcy filing. If the filer might receive an inheritance from a family member or friend in the future, this information must be disclosed during a bankruptcy filing as well.

A bankruptcy attorney may be able to help an individual ensure that they have completed all of the necessary steps during a bankruptcy filing. If the filer is concerned about losing some of their valuable assets through seizure, an attorney may be able to help them protect those assets through lawful means and stop home foreclosure. An attorney might also be able to help defend a person who has been accused of hiding assets during a bankruptcy filing.

Source: Bankrate.com, “What can creditors take in a bankruptcy?,” Justin Harelik, Dec. 16, 2013