Am I on the hook for gifted money I received from my father two years before his Chapter 7 bankruptcy filing?

Question

My father filed for chapter 7 bankruptcy on May 23rd 2024. He gifted me cash to help me out in February 2022. Am I (the recipient) on the hook to pay that money back to the trustee? This would be over two years ago. He had no idea he would run into enough trouble for bankruptcy at the time in 2022.

James L. Arrasmith · Answer

It's understandable to be concerned about receiving money before a family member's bankruptcy filing. In your case, since the gift from your father was given in February 2022, over two years before he filed for Chapter 7 bankruptcy, you are generally not required to return the money to the bankruptcy trustee. The bankruptcy law typically looks back at transactions made within two years before the filing to see if there were any fraudulent transfers or preferences. 
 
However, there are some exceptions and nuances to this rule. For instance, if the trustee believes that the transfer was made with the intent to defraud creditors or if your father was already insolvent at the time of the gift, they might investigate further. But under normal circumstances, a gift made over two years ago should not be considered for recovery. 
 
To put your mind at ease, you might want to consult with a bankruptcy attorney who can give you specific advice based on the details of your father's case. They can provide clarity on whether there are any unique factors that could affect your situation.

Q: Am I on the hook for gifted money I received from my father two years before his Chapter 7 bankruptcy filing?