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    Selling things to family

    Would I be allowed in the year prior to filing ch 7 to sell a car and other items to a family member if they paid me the full current proven value or even original purchase price and then use that to live on until I filed since I lost my job and will be unlikely to ever work again? Its just that selling it to a stranger would bring in much less and I could sure use the funds.

    #2
    Originally posted by dakota112 View Post
    Would I be allowed in the year prior to filing ch 7 to sell a car and other items to a family member if they paid me the full current proven value or even original purchase price and then use that to live on until I filed since I lost my job and will be unlikely to ever work again? Its just that selling it to a stranger would bring in much less and I could sure use the funds.
    I've got the same question. A family member offered to purchase a high-mileage/low-value vehicle from me to help with paying an attorney, but I can't find any guidance if this is allowed or not.

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      #3
      Yes, you can sell anything you own prior to filing. The key is to make sure you get fair market value, and you will need to disclose the transaction to the court. If you sell for less than fair market, the trustes may consider it a fraudlent transfer and go after the asset. Family transactions will always be looked at closer.

      They are really looking for transactions where you might say you sold to a relative, but are really just trying to hide it from the court. Most people woould advise not to sell anything for a time before filing, but you have to do what you have to do. I sold some tools and a motorcycle before filing with no issue.
      Case Closed > 2/08/2010

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        #4
        And if it’s HIGHER than fair market value that is most definitely permitted. Keep all the paperwork that shows why you believe fair market value is maintained.

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          #5
          Besides keeping the evidence of the value, be sure to keep evidence that your family member actually paid you. In addition to a dated bill of sale signed by you and the family member, you should keep a cancelled check with a clear description of the item being purchased.
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

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