Legal Question in Bankruptcy in Massachusetts

Bankruptcy trustees have the power to set aside transfers (such as a sale of property) that are either "actually" or "constructively" fraudulent. If you sold your half of the property to your fianc� for any amount less than the actual fair market value of your half, the trustee would probably try to set aside the sale. At a minimum, the trustee could demand that you turn over the proceeds of the sale to him to pay creditors. That, of course, the worst case scenario. The point, however, is that any transfer of property in contemplation of filing a bankruptcy case is a really bad idea. Sell your half to the fianc� to resolve your financial difficulties, or get a small mortgage, but don't file bankruptcy after doing so.

You might be able to protect your 50% interest in the house with your fiancee without selling it if it is your residence. If you feel compelled to sell it, make sure you are paid a fair price and then see a bankruptcy lawyer about protecting the cash.

Best to see a bankruptcy lawyer even before the sale, of course.