Brad was having financial difficulties and thought bankruptcy might be in his future. He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months, his brother would return the car to him. Brad did file for bankruptcy in 10 months. The bankruptcy trustee can bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors.

Question

Quizplus · Accepted Answer

This scenario describes a fraudulent transfer, where assets are transferred out of the debtor's estate with the intent to hinder, delay, or defraud creditors. Bankruptcy law allows trustees to recover such assets to ensure creditors are treated fairly.

Brad Was Having Financial Difficulties and Thought Bankruptcy Might Be