Fraudulent Transfers (Gifts)
Fraudulent transfers in bankruptcy are really only gifts - or sales for less that the actual value.
One cannot give away one's non-exempt assets and the file a bankruptcy because the giving away of assets before filing is in effect the giving away of one's creditors' assets, because those assets will become the creditors' assets as soon as the bankruptcy is filed.
For instance, if one owes $100,000 in debt and has $50,000 in cash, one cannot give $50,000 to Uncle Bill on Monday and file a bankruptcy on Tuesday. In order to be certain that a gift is protected, it must have been given more than two years before the fliing. For gifts of anything that should be recorded, like land or cars or boats, the two year period begins on the day that the transfer (gift) was recorded. For instance, the day that the deed for land was recorded in the mortgage records.
In addition, to be fully protected the transfer (gift) must also not be vulnerable under the Texas Fraudulent Transfer Act, which goes back 4 years, but is more limited in scope than the bankruptcy code.
Fraudulent transfers that are really fraudulent and made for the purpose of avoiding the effect of the bankrutpcy laws are illegal.