When you are struggling financially, you may consider selling your car or home in order to get cash or decrease your expenses. You may sell anything you want even, if later, you end up filing for bankruptcy.
However, the key is getting the fair market value for the asset. Getting a fair price and transferring assets is legal, but giving away a valuable asset for little or nothing is not.
In the event you file for bankruptcy at a later date, at a minimum, the bankruptcy code requires you to disclose all sales and transfers of property in the two years preceding filing for bankruptcy. The trustee will likely scrutinize what was sold, at what price, and what was done with the proceeds.
Money earned in exchange for assets that you tucked away in the bank may or may not be used to satisfy creditors depending on the outcome of your bankruptcy case. In some states, little to no money in the bank will be protected.
If you spend the proceeds to cover other bills or whatnot, keep a record of how you spent it for the trustee to review. An experienced bankruptcy attorney can advise you on what you can legally do with the sale proceeds.
If you are considering bankruptcy as a financial strategy, contact the Peoria bankruptcy Law Offices of Charles E. Covey for help.