Is there any way to preserve an asset in a bankruptcy that was purchased with money loaned to you by a family member?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Is there any way to preserve an asset in a bankruptcy that was purchased with money loaned to you by a family member?
I loaned my son $1500 last year in a verbal contract to buy a piece of machinery. Now he is looking into bankruptcy and has asked me to supply a document to the effect that I loaned him the money and expect payment at a later date in order now to lose the machine.
Asked on August 31, 2010 under Bankruptcy Law, Wisconsin
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
I'm not completely clear on your facts. Him owing you money doesn't protect the asset. The asset is either protected by virtue of exemptions available under applicable state law (usually the state where the case is filed, but not always), or if there is a valid lien against the property for the value of the property, then that would also protect it. A lien can be created by the execution of a security interest which must be perfected under the laws of whatever state it is created in. This must be done at the time the purchase is made. It cannot be done afterwards and avoid being set aside in a bankruptcy case.
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 13 years ago | Contributor
I'm not completely clear on your facts. Him owing you money doesn't protect the asset. The asset is either protected by virtue of exemptions available under applicable state law (usually the state where the case is filed, but not always), or if there is a valid lien against the property for the value of the property, then that would also protect it. A lien can be created by the execution of a security interest which must be perfected under the laws of whatever state it is created in. This must be done at the time the purchase is made. It cannot be done afterwards and avoid being set aside in a bankruptcy case.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.