Bruce, MI Bankruptcy Law Firms & Lawyers

Under the bankruptcy code, any transfer of real property will be scrutinized - especially when the transaction occurs between the Debtor and an insider (not an arms-length transaction). In this particular case, it appears that you transferred the land to your sister to prevent your creditors from attaching liens to the property. It also appears that you transferred the land without consideration (something of value - like money), which in most circumstances is viewed as an illegal transfer (even outside of bankruptcy). The Trustee is looking at the property as an asset that you should have claimed on your bankruptcy and is using some mechanism to value the property at $50,000. In most cases, you can receive a discharge but unless the Trustee "closes" your case, the case can remain open for months or even years. During the period your case has been discharged but remains open, you must be careful in selling any asset that you possessed at the time you filed your bankruptcy. In regards to the land you transferred to your sister, you can voluntarily put the land back in your name (with your sister's cooperation), but the Trustee will then seek to seize the land for the purpose of selling the property for the benefit of your creditors; or you can tell your sister to surrender the property to the Trustee. You probably want to speak to an experienced bankruptcy attorney to ensure your specific situation does not get out of hand.

The law doesn't require you to report, and even if you do report, there is no guarantee the authorities will take any action. It would only be fraud if the lender filed bankruptcy and wasn't living with you at the time s/he filed.