Beware of Moving Assets OffShore Prior to Bankruptcy Filing

Posted by on Mar 14, 2012 in General Legal Topics | 0 comments

Where  a debtor moves asssets offshore or transfers ownership to entites or persons offshore, this may become a problematic issue for those who have done so and filed bankruptcy.  The bankruptcy system is replete with creditors, administrators, and other parties capable of fishing out those assets.

For example, the chapter 7 trustee can object to a debtor’s discharge if nothing else, defeating the purpose of a chapter 7 filing in an individual case.   A civil contempt order could be considered and even criminal prosecution in more serious matters.   The debtor and third party transferees can also be held accountable for the transfers that took place pre-petition.

Not only do these rules apply in a foreign context, this is almost true of any improper transfer the debtors engages in prior to the filing of a bankrutpcy case.   A transfer does not need to be made with bad intentions for it to be improper.  Thus, the guidance of a competent bankruptcy attorney is necessary to determine whether or not the transfer contemplated is safe prior to filing.

 

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