The Chapter 7 Trustee in the bankruptcy case of Mary Joan Lumbar appeals from the Bankruptcy Court’s judgment in favor of the Debtor’s parents on a fraudulent transfer action, holding that the Debtor could not fraudulently transfer property that would have been exempt.
While state law determines the nature of a debtor’s interest in property, it does not determine whether a transfer of that interest in fraudulent under Bankruptcy Code Section 548; here, the bankruptcy court erred by failing to analyze the transfer of the debtor’s property under the elements of Section 548; on remand, the court should make findings as to whether the debtor received less than reasonably equivalent value from her parents and whether she was insolvent at the time of the transfer or became insolvent as a result of the transfer.
Reversed and remanded for further findings.
[gview file=”http://www.ca8.uscourts.gov/opndir/11/10/116018P.pdf”]