Legal Question in Bankruptcy in Wisconsin

Property Sold or Transferred Prior to Bankruptcy

Property given away, sold, or otherwise transferred on the eve of bankruptcy is subject to the rights of the bankruptcy trustee to proceed against the recipient. He can undo any transfer to a relative for a one year period and can likewise undo a preferential transfer to a stranger for four months prior to the filing of bankruptcy. The trustee can also attack fraudulent conveyances up to four years after the transfer. A fraudulent conveyance is, for example, property which is transferred in order to defeat the rights of creditors to collect on their lawful debts. There are many exceptions to these rules as well as defenses available to the recipient. Your parents should therefore discuss all of this carefully with a bankruptcy expert who is highly experienced in adversary proceedings litigation prior to filing. This would include almost any bankruptcy attorney who has previously served as a standing chapter 7 trustee in the district where the case will be filed. It may be possible to undo some of the adverse consequences prior to filing bankruptcy. However, once the case is filed, this becomes extremely difficult. It may also still be possible to claim an exemption against some types of transferred property and thereby avoid problems. Do not even think about attempting to hide such a transfer, since it is easy to detect from public records. Additionally perjury in bankruptcy paperwork and/or bankruptcy fraud is a major felony which is investigated by the FBI.