paying back a charge on my Mom's CC before filing 13

[Atrix]

I stopped paying my CC about 18 months ago with intent to file 13....have not filed yet...

I purchased some merchandise for my small business $8000 a few months ago on my Mom's CC...I had to to keep the business going...... I have been paying the CC company directly from my business account about $1200 per month....about $5000 to go.

How does this affect a 13 if I file in the next month or so?...

I can pay my Mom's CC off completely in the next 3 months...I don't want to hurt my Mom in anyway.....Did I really mess up by using her card???...

Is there a time frame in which I can pay her back and not file for a 6 months or so....so as not to have screwed up preferencial payback or????

Help!

[despritfreya]

If your business is an entity I doubt it is an issue since the business "borrowed" the funds and is now paying it back out of its own account. The business is not in bk therefore no preference and the payments it made do not get disclosed on "your" Statement of Financial Affairs. If you are a sole proprietorship this may be a problem as it would be a preference. If you are a sole proprietorship, payments made to or for the benefit of an insider (mom is an insider) for the repayment of a loan within 1 year prior to filing must be accounted for in the Chapter 13Plan for “reconciliation” purposes.

Des.

[Atrix]

I am a sole proprietor....

One of the payments was for rent on the business about $2000...which I paid back the full amount with in 1 month to the CC company....last month... Is it still considered a loan from my Mom???

Help! How do I handle this??

I also charged an amount of about $3500 on 1 of my cards....3 weeks ago...I am able to play the full amount by the due date...2 weeks from now...I just needed to get merchandise immedietly....I had no choice and no other way to pay....Should I not pay that amount or should I???

I'm so confused!!! I know I made a huge mistake...but business is busy and I needed merchandise and I didn't have the cash....now I am selling lots and would not need to buy on credit....and can pay back all those purchses.

Business is seasonal and doing very well right now...I just needed merchandise.

Please help with any info on what I should do!

[despritfreya]

Stop panicking. You have done nothing wrong. All you have done is made a preferential payment. Your first course of action is to not make any further payments on the cc. Your second course of action is to document exactly what has been paid over the 12 month period prior to filing so that you and/or your attny can figure out what has to be paid in the Chapter 13 Plan.

Do you owe any taxes (income, payroll, sales, etc - but not property tax) or support obligations - what about wages for any employees (if applicable)? If so, how much?

Are you planning on hiring an attny? If not, my recommendation is that you do as it will make life much easier.

You are doing a Chapter 13. Depending upon what other non-exempt assets you may have and the amount of your priority (tax) debt, all that is required is that you make sure your unsecured creditors are paid no less than what they would have gotten if you had done a Chapter 7. (This, of course, does not address whether or not your budget says you can afford to pay more than just the minimum required.)

Your situation is easily handled in a Chapter 13, not unusual, and should not cause you any anxiety.

I will try to explain in greater detail this evening but others may also respond.

Des.