Bankruptcy

Can I Put the SUV and the car in my Brother's or Sister's Name before I File my Chapter 7 Bankruptcy in Arizona?

By Joseph McDaniel, Esq.

That would be bad. It's what we in the bankruptcy biz call a fraudulent transfer, and it gets you and your siblings in trouble.

This question is asked frequently, and the answer is always the same.

Now, if your vehicle is worth more than the exempt amount in Arizona (five thousand for most folks, ten thousand if you're disabled, although my feeling is that the disability must be serious, and must interfere with walking to count for the ten thousand dollar exemption for a vehicle in Arizona), you may very well want to sell it.

Otherwise, some of the trustees will want you to pay the "excess equity" over a year or so, and some will also demand interest on the amount.

Other Chapter 7 Panel Trustees (you know who you are!) will simply demand that the debtor submit the vehicle to the monthly auction, and if their bid wins, great. Otherwise, the vehicle gets sold and the debtor gets a check for either $5,000 or $10,000.

WHAT I DON'T KNOW ABOUT THE AUTOMOBILE EXEMPTION IN ARIZONA: I have not recently had a situation where a debtor for whom we have filed had a massively overvalue vehicle which had excess equity claimed by the bankruptcy trustee. Or else the debtor was able to simply cut a check for the excess equity, so everyone was happy. But here's what I don't know: when a trustee wants the car sold at auction, and the debtor can't cut a check or the trustee won't cooperate, how long will it take until the debtor gets paid the $5,000 or $10,000 dollar exempt amounts?

Inquiring minds want to know!

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on June 03, 2010 (boomark / email).