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  1. #1
    Join Date
    Apr 2016
    Posts
    1

    Default Giving Away Your Assets Before Filing for Bankruptcy

    My question involves business law in the state of: alberta, canada
    My dad is in the middle of a very messy rental agreement law suit right now. He is most likely going to lose, because he tried to get out of a rental lease agreement that he could no longer afford. It is a multi million dollar rental agreement. In efforts, to minimize his losses, hes in the process of signing over his assets to trusted family members and will probably file bankruptcy when he loses. He wants to make me the head of his corporation. I wouldn't actually do any of the business, he basically just wants my name. Should I do this? What kind of up sides and down sides will this create for me? I am a university student, I'm not sure if that has any validity but I thought I'd mention it. Thanks.

  2. #2
    Join Date
    Oct 2014
    Posts
    8,238

    Default Re: Giving Away Your Assets Before Filing for Bankruptcy

    This site focuses on U.S. law; so if the bankruptcy will take place just in Canada and that’s where the assets are located we can’t help with that.

    In the U.S. the transfers of assets to family members within a year of the bankruptcy for less than full payment for those assets in return would be a preference transfer under the bankruptcy code and the bankruptcy trustee can have the court reverse those transfers and have those assets returned to the bankrupt estate to help pay creditors. Also, in the U.S. if his plans are to transfer the assets in name only but in fact keep control of them until the bankruptcy is over he risks committing bankruptcy fraud, which is a crime.

    I’d not be at all surprised that Canada also has rules to prevent these kinds of game by debtors to try to defeat their creditors from reaching the debtors assets. Before he makes any transfer like this I strongly recommend he consult a good bankruptcy attorney.

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