There are several reasons why anyone who is even thinking about filing for bankruptcy should not give valuable gifts to anyone.
First, if the court finds that the gifts were made in order to hide assets, the debtor may be denied a discharge of all his debts. This denial of discharge is permanent. The debts that were listed in the bankruptcy will not even get wiped out if the debtor files another bankruptcy years later. Fortunately, this happens very infrequently. Usually, if the debtor is honest, and discloses all gifts in the bankruptcy petition, it is practically impossible for the court to find that the debtor was hiding assets.
But even if the court finds that that the gifts were not part of a scheme to hide assets, other problems may also arise. The chapter 7 trustee may go after those gifts, even if the gifts were made months, or even years before filing bankruptcy. If the trustee decides to go after the gifts, he will probably hire an attorney. The attorney will probably first try to recover the gifts by sending letters to the person who received them. If this is unsuccessful, the attorney may file a lawsuit.
Whether the trustee will go after gifts is a complicated question. If you are concerned about gifts you have made, please contact us, and we will be happy to discuss the issue in a free initial consultation.