What happens if you sell a vehicle prior to filing bankruptcy?
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What happens if you sell a vehicle prior to filing bankruptcy?
Asked on July 12, 2012 under Bankruptcy Law, Ohio
Answers:
Terence Fenelon / Law Offices of Terence Fenelon
Answered 11 years ago | Contributor
Yout question requires several more questions to be answered. If you sell the vehicle to a third party for fair market value, be prepared to make a full accounting of the proceeds to the bankruptcy trustee. Also, be prepared to establish the value of the car as well as the indentity of the purchaser. If the vehicle is sold to an insider (friend, relative, etc.) the transaction will come under greater scrutiny. If the price is not what the trustee thinks is fair, he or she could avoid the transaction and regain the vehicle/ You would be liable tfor the repayment of the purchase price to the buyer. If not revealed to the trustee, you would be risking a discharge of debt because you took an action to conceal or dispose of assets. Finally, the answer would depend upon whether the car would be exempt under your state statutes,
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