Legal Question in Bankruptcy in Utah

Is there a time limit on assets I sold before I filed bankruptcy?

I sold a summer home 3 months ago for 15,000.00 I used the money to pay for debts I had , dentists , doctors , credit cards ect. This brought me up to date and I was doing fine Until...yesterday I was notified by the bank that I had to pay off a 20,000.00 loan I co-signed on 4 years ago. It was a vehicle and was recently repossessed. I am now in financial trouble and feel my only option is bankruptcy.

I need to know if the property I sold 3 months ago will be a problem ? Is there a time limitation on selling assets prior to filing bankruptcy?


Asked on 7/29/02, 3:21 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Is there a time limit on assets I sold before I filed bankruptcy?

A bankruptcy would release your obligation to pay the co-signed note. You may, however, wish to see if the bank would consider less than the $20,000 under threat of bankruptcy, and also see if the other co0-signer can pay part of the amount owed. Perhaps together you can reach an agreement which would be acceptable. The bank would probably take payments on the deficiency.

The bankruptcy trustee can go back from three months to two years to check for "preferential payments" which are payments which may not be allowed. If any payments are disallowed, the payee will have to return money to the trustee for him to distribute to other creditors. If you only paid the bills you indicate, it is not likely that the trustee will take any action - you can always wait to file bankruptcy so that you avoid the preference period, which is about 6 months for most creditors.

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Answered on 7/29/02, 4:19 pm


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