If you are thinking about filing for Chapter 7 bankruptcy, it is very important to understand that you may be required to turn over assets to become part of the bankruptcy estate and to be sold in order to generate money to pay back the creditors that you are indebted to. There are some exemptions to this and some assets that you do get to keep, but these bankruptcy laws means that when you file for bankruptcy protection, some of the things that you own are no longer yours to keep.
Because you will need to turn over some of your assets in a Chapter 7 bankruptcy, it is extremely important that you speak to an attorney before you give away any items in the weeks prior to your bankruptcy and, especially, after you have filed for bankruptcy. As our Seattle bankruptcy attorneys can explain to you, giving gifts, transferring assets and even selling things for less than their fair market value can all be seen as attempts to get assets out of your name so that you do not have to turn them over to be resold to pay creditors. This, essentially, is seen a form of defrauding your creditors since they are not getting paid back as much as they could or should be as a result of your gifts.
Your Seattle bankruptcy attorney can explain to you what actions, if any, are appropriate as far as gifting of items before a bankruptcy filing and during a bankruptcy filing. Your Seattle bankruptcy attorney can also help you to better understand the consequences of gifts given during or immediately before a bankruptcy. It is important that you ask a bankruptcy attorney for the specifics on this subject since the consequences may vary depending upon exactly what type(s) and amounts of gifts you give and when and how you give them. In some cases, for example, it might be considered bankruptcy fraud while in other situations, the transaction simply might be reversed and the giftee would have to give the gift back to the bankruptcy estate.