Chapter 13 trustee question

[Christine88]

On my chapter 13 papers I got from my lawyer it says one of the questions the trustee will ask is have you transfered any property worth more than $5000 in the last 6 years. So does this mean property like a musical instrument sold for say $500 is ok? I live in SC.

[justbroke]

They are really looking for Real and other "personal" property which you may have tried to hide. If the note reads greater than "$5,000", a $500 instrument would not need to be reported.

[Christine88]

They are really looking for Real and other "personal" property which you may have tried to hide. If the note reads grater than "$5,000", a $500 instrument would not need to be reported.

I'm curious about the $5000 thing. Where do they get that?

[LadyInTheRed]

I'm curious about the $5000 thing. Where do they get that?

It's just what somebody decided would be significant enought to pursue.

[justbroke]

I'm curious about the $5000 thing. Where do they get that?

It must be a threshold number for your Attorney or the Trustees in your District. Going after a $500 item is typically not worth the time and effort. Going after an improperly "transferred" item (property) valued over $5,000 could be worth it.

[Christine88]

It must be a threshold number for your Attorney or the Trustees in your District. Going after a $500 item is typically not worth the time and effort. Going after an improperly "transferred" item (property) valued over $5,000 could be worth it.

musical instrument in SC is exempt property so they couldn't pursue it regardless.

[justbroke]

musical instrument in SC is exempt property so they couldn't pursue it regardless.

It's not that simple. Musical instruments are covered along with clothing and "household" furnishings under a sort of "everything else" category. That category only has a $4,500 exemption limit.** This may be why your attorney mentioned $5,000 as a benchmark. If you transferred a Stradivarius, I'm sure the Trustee would be interested in determining whether you received fair market value (FMV) and then, where all the money went.

** source of South Carolina's bankruptcy exemptions from Legal Consumer http://www.legalconsumer.com/bankruptcy/bankruptcy-law.php?ST=SC

[Christine88]

It's not that simple. Musical instruments are covered along with clothing and "household" furnishings under a sort of "everything else" category. That category only has a $4,500 exemption limit.** This may be why your attorney mentioned $5,000 as a benchmark. If you transferred a Stradivarius, I'm sure the Trustee would be interested in determining whether you received fair market value (FMV) and then, where all the money went.

SC has a wildcard exemption of $5625. Couldn't that be applied to the personal property exemption category?

[justbroke]

SC has a wildcard exemption of $5625. Couldn't that be applied to the personal property exemption category?

Yes. You would use your wildcard once you exhaust another category.
Always try to use the exact exemption category before exhausting your wildcard.

[dmc-2008]

Does California have a wildcard?

[justbroke]

Does California have a wildcard?

It depends on which California "system" that you use. Under California System II, you get to use the "unused" portion of the homestead exemption. It is quite generous. Of course, you need to really look at what you need to exempt and if you have property with equity, System I may be better. That is why Californians need to examine what they can protect under both systems to determine which is better.