Bankruptcy in Michigan?

Edwards Finance > Loans

Q. I have questions about Bankruptcy in Michigan. What can you keep? Transfering of property before Bankruptcy. Time limits, and so on.

A. While the general federal rule is one-year (on avoidability of transfers), Michigan has a full body of state law that imposes no time limits on transfers of property which were made to avoid creditors. That means that a bankruptcy trustee can sue transferees to recover property (assuming, of course, that the trustee finds out about it). A general rule is that economic activity affec ting a debtor for a two-year period must be disclosed to the trustee. You should consult a Michigan lawyer who can explain the detailed lists of exemptions available to debtors, and to what extent non-exempt property can be converted to exempt property. I am writing an article on choice of law in fraudulent transfers. There is little consistency or pattern in choice of law; but then it is relatively rare that the statute of limitations is a factor (in the Universal Clearing House case, as I recall, for example the result would have been the same whether Maryland or DC law had been applied). By changing domicile it may (or may not) be possible to escape an unattractive state statute of limitations (or absence thereof). (Anyway, think of Bowie Kuhn, who absconded from New Jersey to Florida after the NY law firm he was a partner is was hit with a multi-million dollar judgment for malpractice. Accordint to CBS "60 Minutes" which is, after all, the fount of all knowledge, he claimed homestead and other state exemptions to escape payment; I recall reading elsewhere that he settled a $100 million demand for $1 million.) (Under the Insolvency Act 1987 absconding within six months of bankruptcy is an "offence" here in the UK; and just this week the Times published a case report of the court enjoining a Hong Kong businessman from leaving the UK prior to examination in bankruptcy; but that's another matter.) Of course if English (or, perhaps Michigan) law is applied, the absence of a statute of limitation could be critical, but it is often avoided by the use of asset protection trusts, or homestead rights (in Florida or Texas, say). The longer the period of time that passes, the harder it is to recover the funds, purely as a practical matter. That is true even here in England: the elements of proof needed become that much more difficult to present, whatever the caselaw says. (In the USA, unlike here in Britain, a plaintiff will typically file a lis pendens to assert his claims against property. The equivalent here -- a draconian "Mareva" injunction tying up all the defendant's property -- requires some substantial showing of probable success or prima facie fraud. When I post this comment I will check the case Mr Golden has cited, and also current Michigan law, on Lexis and perhaps I wil have further comment. Note that the bankruptcy trustee steps in the shoes of the creditors; thus as well as having a federal bankruptcy law right of avoiding fraudulent transfers for the year prior to filing he/she can use whatever state (or foreign) law seems attractive.

Ask Edwards a Finance Question

Other Questions:

A person are renting the condo from Colorado asking about his/her landlord law.

I am renting a condo from a person in Colorado. I have recently signed a 1 year extension on my lease. The condo owner has informed me that he is selling the property and will declare bankruptcy. The landlord said that he will sell the condo...

Oregon income tax question regarding refunds ? This is an Oregon state income tax question: In Oregon, for tax puposes, ones income is computed by using the amount from the Federal 1040, line 33. To this certain amounts are added or deduct...

My employer is based in NH. He did not deduct any State tax from my wages for 2005. In W2 box 15 (employer state) is empty box 16 (wages and tips) is also empty I reside in NJ How do I handle this? How do I calculate state tax for NJ? ...

Who can say about Bankruptcy In NC?I do bankruptcy law, but am registered in Massachusetts and the Eastern District of Tennessee. The federal law is the same everywhere, but local stylistic changes and state property protection statutes vary. M...

...

Edwards Finance Menu

Ask a Question
About Us / Me
Contact Me
Privacy Policy

Sitemap

My Favorite Sites

PFBlog
Google Finance
Yahoo Finance
Motley Fool
Nveille's Financial Blog
AllFinanceMatters
Free Money Finance
2MillionBlog
The Terror Finance blog

Q&A Subjects