The quick answer is NO! Nothing good can come from doing this. If you owe money to family and friends, and pay them back, the courts will find out and take the money back to pay your creditors. If you sell property for the sake of having large amounts of cash, the courts only allow a certain amount of money to be exempt from being used to pay back creditors in a bankruptcy. If you transfer or sell property for little or no money for the purpose of hiding it from the courts, then the courts can consider it a fraudulent transfer and take it back. You are clearly asked in your petition whether you have transferred property to anyone in the past 2 years. The Bankruptcy Trustee will also ask the same under oath at your hearing. If you are contemplating filing for bankruptcy, your motives for selling your property will be a factor in whether your bankruptcy is approved. It is legal to sell your property for the purpose of paying back creditors, although it doesn't make much sense. Instead, file for the bankruptcy and see if the debt can be forgiven and your assets could be saved.
Make sure to speak to Jacoby & Jacoby either online or call us at 631-289-4600 to schedule a FREE consultation. We can discuss more about protecting your property in a bankruptcy case.