CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Bankruptcy and Selling Assets: Can I Sell My Vehicle before I File?

Bankruptcy And Selling Assets Tampa, Pasco, And St Petersburg Florida.Can a Car Be Sold Before Filing for Bankruptcy?

Plenty of car owners face financial struggles and consider bankruptcy. It’s one of the most common assets bankruptcy discussed during bankruptcy and can garner a significant resale value. It’s one of the first things a bankruptcy trustee will look at when evaluating your estate in Chapter 7.

There are also instances in which people sell their vehicles to pay their debts. After all, if you can survive without a vehicle and the vehicle is worth money, wouldn’t it be smart to sell it and use the proceeds to pay your past-due debt?

But are you allowed to sell your vehicle on your own before filing according to bankruptcy laws?

The answer to this question varies from case to case.

In most situations, if you own only one vehicle, you’ll choose to exempt it in bankruptcy. Most people rely on their primary vehicles to get them to and from work and other locations, so it’s important to protect it from the bankruptcy trustee. As long as your vehicle doesn’t have an above average value this probably won’t be a concern.

To learn more about exempting assets in general, check out this article from The Balance.

Selling a Vehicle before Bankruptcy

If you own a second vehicle or you’ve decided you truly don’t need a personal vehicle for your day-to-day life, the situation is a little different.

Selling a vehicle prior to filing for bankruptcy is considered a pre-bankruptcy transfer of property, which can attract the attention of the trustee and potentially put you at risk for accusations of fraud.

When determining whether a pre-bankruptcy transfer was inappropriate, the trustee looks at:

  • Whether or not the property would have been exempt had it not been sold
  • How much money you received in the sale
  • Why you chose to make the sale
  • How the proceeds from the sale were used

Chances are if the vehicle would have been exempt and you received fair market value for the sale, it’s unlikely there will be an issue other than waiting for the trustee to investigate these issues.

If the vehicle would not have been exempt, the investigation is going to be more in-depth. If the sale was not for fair market value, there’s a good chance the trustee will undo the sale or force you to pay the fair market value to the estate.

Trustees also consider the intent of the sale by considering who purchased the asset.

For instance, if you sold your vehicle for well below fair market value to your sibling, it’s going to seem as if you were trying to conceal the asset from the bankruptcy court. On the other hand, if you sold your vehicle for fair market value to a stranger and used the proceeds to pay your bankruptcy filing fees, they’ll view your actions in a more positive light.

Why You Need to Work with a Bankruptcy Attorney

If you’re considering filing for bankruptcy and would also like to sell a vehicle or any other valuable asset before filing, it’s essential you work with an experienced bankruptcy attorney. Trustees have the authority to look back several years into any transfers of assets and at a minimum, they’ll go back two to five years.

Having an attorney on your side makes the important decisions you face prior to and during bankruptcy a little bit easier. People consult attorneys before making a variety of significant financial moves and filing for bankruptcy should be no exception.

If you’d like to know more about transferring assets or you have questions about bankruptcy, contact the Law Office of Robert M. Geller at 813.254.5696 to schedule a consultation.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

10 Signs You Should File for Bankruptcy

When it comes to your finances, there may come a time when you feel like bankruptcy is the only way...
Read More

What Do You Need to Know Before Filing for Bankruptcy? A Chapter 7 Bankruptcy Attorney in Florida Can Help You During this Time

What happens during the time leading up to filing for Chapter 7 bankruptcy? A Chapter 7 bankruptcy attorney in Florida...
Read More

What Does It Mean to Declare Bankruptcy?

What does it mean to "declare" bankruptcy? Your bankruptcy law attorney will help you through the process. Declaring bankruptcy is...
Read More

Student Loan Forbearance Ends April 30th. Here’s What You Need to Know

The federal government extended forbearance of repayment of student loans during the COVID-19 crisis. This forbearance was due to end...
Read More

Is Better Money Management on Your List of Resolutions for 2022?

If you’re like most Americans, improving your financial situation is on your list of New Year’s resolutions for 2022. Whether...
Read More

3 Reasons to Send Your Bankruptcy Attorney in Tampa Florida a Christmas Card

Have you begun making your Christmas card list yet? Did you include your bankruptcy attorney in Tampa, Florida? It seems...
Read More

What Was the Biggest Money Management and Bankruptcy News of 2021?

Like most years, bankruptcy was a topic that arose in the news many times throughout 2021. Topics related to money...
Read More

3 Best Bankruptcy Tips of 2021

Learning how to manage your money is an ongoing process. Even the smartest money minds out there can always learn...
Read More

How to Prevent Bankruptcy from Ruining Your Holiday Season: Why a Spending Spree Before Bankruptcy Could Hurt You in the New Year

Should you go on a spending spree before bankruptcy to celebrate the holiday season? The answer might surprise you. The...
Read More

How to Avoid Holiday Overspending

The holidays are upon us and, as usual, many people are trying to keep their spending within a budget. As...
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions