Selling stuff before bankruptcy...

[aaengel]

Hello again,

I made an earlier post about buying a car before filing... I was wondering, I just sold a motorcycle to a stranger for a fair price, and am selling another one... is this ok? I've heard that selling stuff before filing is iffy. But I sold the one on ebay and am trying to sell the other one. Will it be ok if I file later on, during December or January? And let the sale from these bikes get a few months inbetween?

[kornellred]

If you owned the bikes free and clear, and you did not make large deposits of money into your bank accounts, then there would be no way to discover that you had ever owned the bikes to begin with. Besides, you are not "hiding" or "transferring" assets - you are liquidating assets. There is no way that selling items that you own can be connected with an anticipated bankruptcy filing.

[Diesel73L]

Hello again,

I made an earlier post about buying a car before filing... I was wondering, I just sold a motorcycle to a stranger for a fair price, and am selling another one... is this ok? I've heard that selling stuff before filing is iffy. But I sold the one on ebay and am trying to sell the other one. Will it be ok if I file later on, during December or January? And let the sale from these bikes get a few months inbetween?

No matter when you sell it you're going to end up with cash which will need to be covered under an exemption. If it's not exempted the trustee can take it-and you can bet they will because its cash-it's not something they would have to sell in order to pay your creditors. The cash would just go directly to them.

[despritfreya]

Oh dear Lord. . .

There is nothing wrong with selling assets prior to filing bk so long as. . .

1. The sale is an "arms length" transaction meaning the sale price was for fair value and real money changed hands.

2. You keep track of how you spend the money so that a Trustee won't think you are hiding the cash in your mattress. Basically you deposit the funds and then live off the money before filing keeping detailed records.

3. You DISCLOSE the sale (transfer) on question 10 of the Statement of Financial Affairs.

4. If there are any funds remaining when you file you try to find an exemption that covers them otherwise the $$ goes to the Trustee.

As it relates to the comment that the vehicles cannot be traced if there was no money owed. . . wrong. Trustee’s have access to motor vehicle records and routinely run reports on debtors.

Des.

[ValleYum]

The OP is in Michigan and can choose the Federal bankruptcy exemptions.

If the OP is not trying to protect home equity he/she will have a fairly generous wildcard amount (Up to $10,825 - if he/she has not claimed the full $21,625 of the federal homestead exemption) to cover cash if they wish. Double that amount if they are married and both filing bankruptcy.

If the cash is expended for day-to-day living expenses and decent records are kept - there won't be any to exempt or for the trustee to take.


ETA: Yeah and what Des said. LOL Dammit I need to check for posts before I hit enter! hehe

[despritfreya]

Dammit I need to check for posts before I hit enter! hehe

No, not true. If several posts have similar content that should give OP comfort in what is being said. So, hit that enter button as many times as you would like to.

Des.

[Pandora]

Oh dear Lord. . .

Did anyone else picture that being said by Des with an exhaustive sigh & pauses in between each word.... or was it just me? LOL

[DYLAN150]

I already asked this same question 3 months ago. Me too, 2 motorcycles. I sold both of them for fair market value, my attorney said no problem. I am not claiming bankruptcy but will most likely get a judgment against me. (saw 2 attorneys, both said go for it) If your like most people, that money will be used up for living expenses before you file.