Can my brother sign a motorcycle over to me so that creditors cannot seize it?

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Can my brother sign a motorcycle over to me so that creditors cannot seize it?

My brother (in OH) got a divorce this year, and is in arrears for child support and owes the lawyer too. Can he sign his free and clear motorcycle over to me (in MI) so that it can’t be seized by the state of OH, or the lawyer, or any other creditor?

Asked on December 7, 2010 under Bankruptcy Law, Michigan

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

He could, but what would likely happen is that the transfer will be set aside as an intent to defraud creditors or potential creditors.  And in the end he may get in to even bigger trouble by doing so and you may as well.  It may be in his best interest to sell the motorcycle to help pay his child support arrears and the attorneys. If his ex gets help from a state agency then they will start to garnish his wages.  If the lawyer gets a judgement - or if his ex goes that way too - they will start to levy on his bank accounts and to take his personal property.  He needs to sit down and make a different plan.  This plan will not do.  Good luck.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Probably not. If it appears from the circumstances that the transaction is intended to defraud creditors, they have an excellent chance of having it reversed. Signs that it is to defraud creditors include exactly what you describe: a debtor deep in arrears; a transfer made not for (more or less) market value, or, as in this case, for free. It would be different if your brother was getting something palpably of value for the motorcycle--that would greatly increase its chance of the transaction standing. So you gave him, for example, at ATV in exchange for the motorcycle, that would look better--though if your brother keeps using a motorcycle after "transferring" it to someone else, that right there is a dead give away that it was not a real transfer or transaction.


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