Expert: Terry Leeders - 8/3/2008

Question
I have a friend who is about to file bankruptcy.  I am planning on either loaning her $6000 to get a mobile home or purchasing it myself and basically doing a rent-to-own situation.  Would bancruptcy law allow her to "own" the mobile home, and the equity be protected from creditors, or do I really have no choice but to keep it in my name until the bankruptcy is through.  I would prefer it to be in her name, unless the money would be basically lost when she files.  Thank you in advance for your help.

Answer
I would recommend not giving her funds or assets just prior to bankruptcy as the court can look at those closely.  Depending on where she lives, that can be an asset in her case that the court could sell to pay her debts.  Also, that debt would be discharged in her case if it was a loan.  You could rent it back to them, that would be acceptable, but I would still advise to wait until after the case, just to avoid any issues.