Gifts Before Filing Bankruptcy in Minneapolis, Minnesota
Whether you are receiving a gift or have given a gift prior to filing bankruptcy, keep the following things in mind.
First, if you are receiving a gift, you will need to disclose what you have received. Receiving a gift is generally not a problem, in itself, but it may have other implications. For example, you will need to list the assets you have received and it could interfere with your exemptions. As another example, if you receive funds before filing, you may have to answer to the trustee about where they came from. The same principal applies to an inheritance you may have received prior to filing. You will need to disclose it on your bankruptcy schedules and it could create other implications in your case.
Secondly, if you have given gifts prior to filing, keep in mind transferring assets prior to filing can create fraudulent transfers and the transfer can be avoided. Best advice is to not transfer property before filing. Generally, the rule of thumb is whether the gift was worth $600 or more, then the trustee will look at avoiding the transfer. Say before filing your minor child had a birthday and you got them $50 worth of presents, this usually will not be a problem. Now say, four months prior to filing you gifted your daughter a car you didn’t use anymore worth $1,000. This will likely be a transfer the trustee will either want to avoid or settle for. Again, best advice is avoid doing any gifting prior to filing.
As always, every situation is different, if you are planning on receiving or giving a gift, please speak with a knowledgeable attorney to see what the implications may be.
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