Receiving gun from a soon-to-be felon, advice needed.

[MachIVshooter]

Once the guns are gone from his possession, they are no longer part of whatever assets remain to him--and thus should not be of interest in any bankruptcy proceedings.

Oh, they might well be if the BR court knows about them.

It is my interpretation that the trustee, should he find out about the transfer and determines it was an attempt to hide assets, will either deny the case or come up with a sum that the debtor must pay based on the reasonable market value of the guns to make a quick sale. For example, the BR attorney may ask how much one could make selling the guns quickly, not what they're really worth. Basically, if a person were to liquidate their guns (most likely sell to FFL), they'd probably only get 40-50% of their book/shelf value. Most likely you're friend would have to pay that sum.

If your friend no longer has the firearms, the BR court will likely do something similar, assuming they know about them. Of course, they're probably not privvy to the FBI's information on the transfer, and because your friend is truly not trying to hide them but is actually forced to give them away, he would not be committing purjury to state that he did not own any guns, was not trying to hide assets or engage in preferential distribution.

All that said, it sounds like his future bankruptcy would be a whole lot more complicated than a typical single/married chapter 7 or 13.

Honestly, if I were you, I'd hang onto all of them until his BR case if final and debt is discharged. Even if they did discover the guns were transferred, I don't think anything could happen to you, only to your friend. But I'm not an attorney, and you also won't have plausible deniability regarding knowledge of is bankruptcy, given your status in the family. Consult a lawyer.

 

[bushmaster1313]

I think the Bankruptcy Court can go after cash that the debtor paid within a certain period of declaring bankruptcy. The idea is that those creditors paid just before the bancruptcy should be in the same boat as the creditors after the bankruptcy.

See a lawyer before you sell any of the guns you get from your friend.

 

[Frank Ettin]

I think the Bankruptcy Court can go after cash that the debtor paid within a certain period of declaring bankruptcy....

Either cash or property.

 

[bushmaster1313]

This was on the internet:

If you are planning to file for bankruptcy in the near future, it is important to consider the gifts you have given to family members in the recent past. Giving large gifts or transfers that are under fair market value to an “insider” within two years of filing for bankruptcy can trigger the finding of a fraudulent transfer under federal law. An insider is someone who is related to or close to the individual or business, like a family member, another member of the business entity or other affiliate of the individual or business. Further, while federal law only looks back two years, many state bankruptcy laws include their own version of the fraudulent transfer time period. In some states, the court may look back for a period of up to seven years before the debtor filed for bankruptcy to determine if there were any fraudulent transfers.

How Courts Uncover Fraudulent Transfers
While there are several ways a court may find a fraudulent transfer, it is important to note that a fraudulent transfer can be voluntary or involuntary, as well as intentional or in good faith. A court will find a fraudulent transfer when a debtor transfers his assets to an insider for the purpose of protecting his property from future bankruptcy proceedings. A court may also find a fraudulent transfer when the debtor gives a large gift to a family member, with no intention of trying to shield the asset from his creditors.

Unfair Preference Fraudulent Transfers
Another type of fraudulent transfer is an unfair preference. This means that when an individual or a business favors a creditor or pays off one particular creditor too soon after filing for bankruptcy, this unfair preference can trigger the finding of a fraudulent transfer. While many people would prefer to pay back family members before other creditors, this can cause problems down the line. Under federal law, a large payment to an insider is an unfair preference when made within one year of filing for bankruptcy. A large payment to a creditor is an unfair preference when made within three years of filing for bankruptcy.

Consequences of Fraudulent Transfers
When a fraudulent transfer is found, the court will recover the property or the value of the property and consider it an asset for bankruptcy purposes. Further, if the court finds that the fraudulent transfer was done to intentionally shield the asset from bankruptcy, the court will not allow the debtor to go through with the bankruptcy.

Getting Help
Fraudulent transfer in bankruptcy law does not mean that you are barred from giving any gifts to family members. Small customary gifts, generally under $200 in price, will not give rise to a presumption of fraudulent transfer. However, before you give any gifts or transfer any assets, you should consult with a bankruptcy attorney to prevent creating problems for yourself down the line.

 

[rust collector]

Bushmaster has actually done some legwork rather than opining on how the system ought to work. You will be dealing with the FBI, US Courts, state laws and licensing, ATF, and US Bankruptcy court. These folks are from the government and they're here to help

I have no bone to pick with any of these agencies, but things don't necessarily work the way you think they will or they should. Bankruptcy trustees have an obligation to recover assets for the benefit of creditors, and debts incurred through fraud or criminal activity might not be discharged. If you are reluctant to pay a good attorney to help steer you through this, your free gift may be costlier than expected.

 

[baylorattorney]

Rustcollector, surely you are aware of the first rule regarding the Internet? Dont believe it. Anybody can post anything on the www.

 

[j1]

consultation

I only have one thing to add. If you are a member of the NRA consult them on the question. If you are not join and then consult them.

 

[Art Eatman]

Since the loss of the firearms is coming about due to law and court action, it looks to me that their value would not be an issue at some future time when a bankruptcy is considered. It is a different situation than an attempt at evasion of asset-values.

Forced disposal, not a voluntary disposal.

 

[Frank Ettin]

Since the loss of the firearms is coming about due to law and court action, it looks to me that their value would not be an issue at some future time when a bankruptcy is considered. It is a different situation than an attempt at evasion of asset-values...

That's possible and seems reasonable, but when dealing with legal matters, especially bankruptcy, that doesn't necessarily mean anything. Personally, I don't know as I sit here. I'd want to do some research if I needed to answer that question in the course of my practice.




Sent from my iPad using Tapatalk HD

 

[Art Eatman]

If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

 

[bushmaster1313]

If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

Does there have to be effort at evasion?

 

[Frank Ettin]

If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

The court didn't take the asset. The OP's future father-in-law became ineligible to physically possess the asset. But he continued to have some limited control and choices concerning the disposition of the asset.

For example, he must have known he was deeply in debt. He could have sold the asset, or had it sold, to create a fund to help pay down the debt.

The availability of options can be significant in a bankruptcy preceding. As I recall, it's considered an equitable action, and one who seeks the protection of bankruptcy must have clean hands.

 

[leadcounsel]

This is such a complicated situation involving federal and state law that you really need to hire an attorney experienced in bankruptcy, criminal and firearms laws.

You are right to suspect that a bankruptcy judge may not allow the divestiture of his assets for 'free' prior to him declaring bankruptcy. That is possibly illegal and could implicate you, the recipient, in a fraud on the court if there's an attempt to conceal assets. This might be avoided if you pay into his estate fair market value.

With regard to the transfer itself, absent these other issues, no reason to think that a soon-to-be felon can't transfer lawfully acquired guns. However, were they lawfully acquired or from the product of dirty money?

Hire a lawyer, and don't take possession until you have a answer that protects you.

 

[Jpnorcal]

Yea, this is like seeing you mother-in-law drive off a cliff in your new range rover. Complicated...

 

[Sav .250]

"The arrangement is being supervised by the FBI." I`d say your on pretty solid ground.

 

[Kleanbore]

I think that when we consider this from Frank Ettin:

Here's another one I, as a lawyer wouldn't begin to try to sort out over the Internet.

[1] In these sorts of deals, the details matter; and we don't have all the details. If I were working on this professionally, I'd want to read all the documents involved and talk with the prosecutor about how this has all been set up and what's on the horizon as far as the civil forfeiture proceedings.

[2] Depending on how this is all set up, and the timing of everything, if the friend files bankruptcy, his creditors might try to set aside the gifts of his gun collection as a preferential distribution. I don't have enough information to begin to assess whether or not they might have a decent case, but if enough money is involved, and the creditors are coming up too short, they might take a run at it. If they do, the OP will find himself in some litigation in the bankruptcy court if he wants to keep the guns.

[3] There may well be income tax issues for the OP. Gifts are income.

[4] Then there are the usual problems with asking for advice about real life, personal legal problems from a bunch of anonymous strangers. They may or may not know what they are talking about, and this is a public place. These matters need to be discussed with one's own lawyer in private -- where it's all confidential.

[5] Yes, lawyers are expensive. How much are the guns worth? And in general, paying a lawyer to help keep you out of trouble is a lot less expensive than paying a lawyer to try to get yourself out of trouble.

....we can close this with this from leadcounsel:

This is such a complicated situation involving federal and state law that you really need to hire an attorney experienced in bankruptcy, criminal and firearms laws.

You are right to suspect that a bankruptcy judge may not allow the divestiture of his assets for 'free' prior to him declaring bankruptcy. That is possibly illegal and could implicate you, the recipient, in a fraud on the court if there's an attempt to conceal assets. This might be avoided if you pay into his estate fair market value.

With regard to the transfer itself, absent these other issues, no reason to think that a soon-to-be felon can't transfer lawfully acquired guns. However, were they lawfully acquired or from the product of dirty money?

Hire a lawyer, and don't take possession until you have a answer that protects you.

Emphasis Added