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Sold vehicle in 24 months - normal course of business

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    Sold vehicle in 24 months - normal course of business

    Hi,

    Most attourneys will state that any titled asset such as a car needs to be claimed if the transaction occured in the last 24 months. Question - the "Statement of Financial Affairs" schedule states "outside of normal course of business" - it seems like they really mean a business transaction between businesses which I would think would not occur in a consumer bankruptcy. Hence, this wording in my view appears to be misleading. Why don't they just state any assets sold or transfer as opposed to using the phrase "transfered in a normal course of business"? Am I reading this correctly? To the lay person, selling an asset to pay bills if you are downsizing your expenses, say becoming a one car family as opposed to two cars would be considered normal if the funds were "normal" and not a gift transfer of something sold for $100 when it had a true FMV of thousands? I believe that if you get the cash on hand to pay bills if you are falling behind would be "normal business" - but the 2005 reform act states otherwise?

    #2
    Yes, they want to know every transfer of anything of value you have made in the 24 mths leading up to the BK. You are allowed to sell a vehicle for FMV to any one prior to filing BK. It is easier if you sell to a neutral third party and not an insider (family, friends or business partners). The Trustee wants to know what you sold, to whom, its FMV and what you actually received as 'consideration'.

    Also the Trustee wants to check the title to make sure it was properly transferred. If the vehicle was not transferred properly, then the Trustee can avoid the sale and get the funds for the BK estate. The Trustee makes a commission on any assets recovered for the estate. Remember, the Trustee is looking for assets to fund the BK, pay creditors and increase their own income.

    As to the words used: the petition was written by attorney's! Why take two words to say anything when you can take 15?!!
    Filed CH 7 9/30/2008
    Discharged Jan 5, 2009! Closed Jan 18, 2009

    I am not an attorney. None of my advice is legal advice in any way..

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      #3
      Another question

      What if you did a private sale and don't have access to the persons full name and address - does the trustee do a DMV search history or make the BK filer perform this task?

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        #4
        Trustee's often do an asset search, and title transfer search. If an asset or title transfer comes up that you did not list on your schedules, you are going to be in trouble with that trustee. You should definitely list all the info you have on the car you sold.
        You can't take a picture of this. It's already gone. ~~Nate, Six Feet Under

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          #5
          Follow-up

          Thanks - but my question is if you didn't know the name or only know the first name of whom you sold the asset? IE - if someone comes by with cash and a first name, as long as its on the BK schedule the trustee's office will do the rest if he feels necessary? When someone wants to buy an asset - most people just take the cash and sign over a title if necessary ( if the asset warrants a title), but I never asked for an ID for any item I ever sold and don't know anyone who does this for private transactions - ie, someone answering a craigslist ad who comes by to purchase the items.

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            #6
            Don't worry. The trustee can find where it went. What did you do with the money?
            All information contained in this post is for informational and amusement purposes only.
            Bankruptcy is a process, not an event.......

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              #7
              What did I do with the $

              I sold my jetski around a year and a half ago to a guy who was going to export it. I got $6500 but don't know his name and never check any ID - just took the cash. Bought an old boat to fix up - still have the boat, plus had a kid with another on the way. Thank god the wife still is employed.

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