I would check with a bankruptcy attorney, but so long as you received fair market value (FMV) for them, that is generally not an issue. You must be able to prove this though. The Trustee is likely to be very thorough that it was not a backhanded way to transfer property on the eve of bankruptcy in a "sham" transaction.
Bottom line: If you cannot prove a genuine transaction for FMV, and the transaction is otherwise a sham, the trustee will avoid (undue) the transfer, take the vehicle(s), and sell it to recover money for the creditors.
Please talk to your bankruptcy attorney before doing this transfer.
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Selling cars to children pre BK
Well, I am not trying to do something illegal that is why I am asking first. I have 2 vehicles that my children have driven (exclusively) for 2-7 years. I wanted to sell them to them (they have been paying them off slowly, I just need to transfer the Titles). I was planning on filing BK sometime next year (early Spring). I am in MI. Of course, I should have done this YEARS ago but had not intended to file BK and didn't even think about it. Thoughts? Concerns? Issues? Thanks.
I will add one is a 2006 Honda and the other is a 2007 Honda...one has 260,000 miles and the other 150,000 miles...definately not pricey vehicles.
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