Bankruptcy Mistake #3: Transferring Assets

North Carolina has exemptions in place to protect your assets making it unwise to transfer property to others before a bankruptcy filing. If you transfer those assets out of your name, the exemptions cannot be used without getting the property titled correctly again. It is not a good idea to transfer assets to family members or friends because the trustee can also ‘avoid the transfer,’ meaning he can take the property back and sell it.

Makes sense, right? It would be unfair to creditors if people could give away their property to their friends and then extinguish their debts in a bankruptcy. People get to extinguish debts because they are honest, not because they are able to trick the system.

Here’s the good news: the bankruptcy system rewards honesty. Over 90 percent of people filing for bankruptcy keep ALL of their property because it is protected by exemptions. Contact an experienced real estate attorney to figure out how exemptions would work for you.