Expert: Terry Leeders - 12/7/2008

Question
Hello,
I was wondering what happens when a gift is given by someone who is going through bankruptcy proceedings.  Does the court do an accounting of the gifts and retrieve them from the person who received them? (Illinois)
thank you

Answer
The debtor needs to list all gifts, transfers, and payments to creditors.

The petition requires a debtor to disclose the following:

List all gifts or charitable contributions made within one year immediately preceding the commencement of this case except ordinary and usual gifts to family members aggregating less than $200 in value per individual family member and charitable contributions aggregating less than $100 per recipient. (Married debtors filing under chapter 12 or chapter 13 must include gifts or contributions by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)

If large enough, the trustee can force the transaction to be reversed, bringing money back to the bankruptcy estate.