I sold a 2010 Nissan Xterra to my ex-girlfriend in Oct 2018 for $5. The vehicle was paid off and retailed for $5500. The reason I sold her the car for so little was to make sure her children had reliable transportation and I had 2 other vehicles I could use.
I am contemplating a chapter 7 at this point. My question is;
1. do I have to tell the trustee of the sale of the Xterra for $5
2. Will they come after my ex for the car?
3. If I do report it, will this affect my chances of having my chapter 7 done?
Yes, you have to tell the trustee about this transfer.
Yes, I'd expect the trustee to seek to force the return of the vehicle.
If you wait for two years from the date of the transfer, you'd be okay from a bk law standpoint but the could be state law issues.
If you disclose this transfer it probably won't be a problem for you getting a discharge but it will for your ex.
A local attorney will be very important.
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That is definitely a problem. You cannot sell or transfer assets for less than fair market value. The bankruptcy petition requires disclosure of any transfer within 2 years. In my jurisdiction (Minnesota) the statute of limitations is 6 years. So trustees will always ask at the hearing about transfers within these time periods and will, if it appears there was something hinky going on...like the situation you described, go after the person you transferred it to. Commonly known as a "claw back".
You see from the prior answers that bankruptcy is a very complicated process and timing can make it easier or more difficult. Please take time to educate yourself about bankruptcy before jumping into the unknown. As part of your education watch the Bankruptcy Court videos (link below) which explain the bankruptcy players and how bankruptcy works. Important - do not assume the information you see on the Internet is accurate or applies in your situation.
Most Arizona consumer bankruptcy attorneys offer a free consultation about the basics of bankruptcy. Please take time to educate yourself and to determine which attorney is the best to assist you in the process. It is best to interview two or three attorneys before making a decision who to hire. When interviewing the attorney ask how long they have practiced bankruptcy law. Ask what percentage of their practice is focused on consumer work. Ask whether they are experienced in both chapter 7 and chapter 13 cases. Ask about their policy of returning phone calls. Ask the attorney for references. Don’t assume the attorney is being honest about their experience and capabilities. If, after talking with them you are still confused about the issues you raised, find another attorney. Check them out with the various ranking sources: such as www.AVVO.com, and the State Bar (make sure they do not have complaints), also look at their on-line reviews.
Any good bankruptcy attorney should be committed to answering specific questions about your situation and help you understand your options. At all times remember this is your bankruptcy and you should understand what is happening. The attorney should educate you, be there to assist you in how to avoid pitfalls and help you plan for your future after bankruptcy. In other words, they should be your guide through this process. There are hundreds of “bankruptcy” attorneys in Arizona. Of those just a few will fit the criteria set forth above.
I hope this information is helpful.
Diane L. Drain, Law Office of D.L. Drain, P.A. Phoenix, Arizona. This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the bankruptcy code requires that we call our firm a "debt relief agency." This information is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the related issues. Nor is this advice intended to create a client - attorney relationship. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding your specific situation.
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