Browse terms
The bankruptcy process
Transfer
In bankruptcy, a transfer of property is any mode or means by which a debtor disposes of or parts with property. The Bankruptcy Code's definition also covers creating a lien, keeping title as a security interest, and the foreclosure of a debtor's equity of redemption. 1
Talk to a lawyerWhat counts as a transfer in bankruptcy?
The definition is broad. It reaches every way of giving up property or an interest in it: directly or through someone else, outright or with conditions attached, by choice or against the debtor's will. 1
So a transfer is not only a sale. Giving property away, paying a debt and putting a lien on property can all fit the definition. 1
Transfers matter because a trustee can undo some of them. A Chapter 7 trustee may try to recover money or property under the trustee's avoiding powers. 2
Past transfers have to be disclosed. The statement of financial affairs asks the debtor written questions about transfers of property, and it has a part on certain payments or transfers made before filing. 1 3
Which past transfers can a trustee undo?
| Kind of transfer | Look-back period |
|---|---|
| A payment that gives a creditor more than it would receive in a Chapter 7 liquidation (a preference) 1 | The 90 days before filing, or one year if the creditor was an insider 1 |
| A transfer for less than reasonably equivalent value while insolvent, or one made with actual intent to hinder, delay or defraud a creditor 4 | Within 2 years before filing 4 |
General rules only. Other conditions and exceptions apply.
Common questions
Is paying back a loan a transfer?
A debt payment is a way of parting with property, and a payment to a creditor shortly before filing can be a preference. 1
Does a transfer have to be voluntary?
No. The definition covers voluntary and involuntary ways of parting with property, and it names the foreclosure of a debtor's equity of redemption. 1
Can I transfer property to a family member before filing?
Sources
Moved money or property before filing?
A bankruptcy lawyer in your state can tell you how a past transfer is likely to be treated.
Connect to a bankruptcy lawyer