How to Handle Unique Income Circumstances

[tomorrow]

I'm posting a lot of question on this board today. I hope you have patience with me while I get my paperwork in order since we're pro se.

Three years ago my husband decided to start a company. He had a foreign investor who would just give him some money for the business and we'd take out the bare minimum to live off of. Often, not having enough to cover our bills...hence the bk.

What classification is this money we used for expenses? Not wages, not money from operating a business because it wasn't money we MADE from a business. The investor was/is planning on having us pay them back so it was essentially a loan, not a gift.

The investor doesn't want to be known, so they forbade us from disclosing their name on anything including bk paperwork, but we're going to have to account for our income over the last two years so how do I go about doing this?

[justbroke]

Many small business owners take a "draw" from the company. You are asking questions about business organization and how the principals are paid. You may have underlying tax issues if you did not pay taxes on the income. Bankruptcy law really doesn't distinguish income as the definition is literally money receive from ALL sources on a regular basis.

If you had actual business expenses, those would have been reported on your balance sheet each year that you did taxes.

You MUST INCLUDE them as a creditor if they are claiming that it was a loan when you took the draw. In some business models, a draw could be a "loan" against future earnings. You are right, you are in a special situation, but it's not unique. I'm afraid that this "creditor" -- which is what they are if they are claiming the draws were loans -- is trying to do an end-run around the bankruptcy discharge process. To me, it reads as if this "investor" is going to try to collect from you after you are discharge from the bankruptcy, which would be a violation of the discharge injunction (if that debt is dischargeable and discharged).

You should really start consulting with some bankruptcy attorneys. They are going to tell you that you must disclose the investor/creditor, especially if they are claiming that it was a loan.

Bankruptcy is designed to give you a clean slate. It is also designed to put all creditors on notice that you are insolvent and that their debts will be discharged (with special exceptions).

At least, those are my thoughts.

[tomorrow]

Okay, so if we go ahead and list it as a creditor, we just put in the foreign address and they get sent a notification. Fair enough. What if they don't speak English? Oh well, I guess!

[justbroke]

Okay, so if we go ahead and list it as a creditor, we just put in the foreign address and they get sent a notification. Fair enough. What if they don't speak English? Oh well, I guess!

If this is a creditor you would list them on the appropriate schedule and the mailing matrix should include their delivery address. If they don't speak English, I don't know what you would do. Maybe, after the case is opened, send the Notice of Bankruptcy again, by mail, with a cover letter.

[LadyInTheRed]

I am unaware of any laws that require legal notice to be translated to a foreign language. If somebody is investing or otherwise doing business in the U.S., it is up to them to figure out to understand their mail.

I hope you will consult with two or three attorneys about your situation before you attempt to file a pro-se Chap 13. Most BK attorneys give free consultations.

Have you noticed that there is a pro-se section on this forum? You may want to post there so that people realize you are a prose debtor in need of help.