Should You Sell Some Assets Before Filing Bankruptcy in Cobb County?

A lot of times I’ll also get questions about whether before filing the bankruptcy, you should sell some either handguns, or jewelry, or artwork, or some other type of asset. The general good advice, I think, is that you should at least consult with your bankruptcy attorney first. There may be instances where it makes perfect sense to go ahead and sell those items. In other cases, it could just complicate the bankruptcy case. In fact, you are required, when you file the bankruptcy petition, to disclose any large transfers or sales of assets prior to filing the bankruptcy case. Usually, the rule is for two years before you file the case
So, for example, if you sell a vehicle that is worth $10,000 to a family member for $500, you have to disclose that transaction on your bankruptcy case. But more importantly, and this is where you usually get into trouble, is that the Chapter 7 trustee, and that’s the person who monitors your case and makes sure that the bankruptcy petition complies with all the laws, they will actually undo that transaction and they will file a lawsuit against you in bankruptcy court to undo that transaction.
If it gets to that point, they’re going to want to know, that is the trustee, will want to know what was the amount of the sale, when was the sell made, to whom the sell was made, how much money you received from the sale, and what you did with the proceeds from the sale.
A lot of times, this only complicates the Chapter 13 or the Chapter 7 case and it actually will increase the amount of your attorney fees because your attorney is going to have to spend umpteen hours responding to the Chapter 13 or the Chapter 7 trustee’s request.
On a final note, if you have any questions as to whether you should sell, transfer, or otherwise convey any of your assets before filing a bankruptcy case, please call my office at 770-792-1000. The consultation is always free.