Buying a car or boat after discharge

[familyof7]

What if I buy a car or a boat after close and discharge but befroe 180 days will that be considered fair game for the trustee or is it exempt because my dad has a car and a boat I want to buy he will work w/ me on pmts he is my dad but I am not going to do this until after bk discharge and close if I do it at all but even though I will pay him in pmts he will give me a clear title (he wont be a lien holder) so should i wait for 180 days or does it matter after close

[HHM]

You can buy whatever you want after you receive your discharge. In fact, you can buy whatever you want the day after you file. The BK estate is created on the day you FILE your petition (all your assets and liabilities that exist on that day and prior to that day, are part of the BK estate). Any property you acquire after the day you file, is not subject to the BK (there are 3 exceptions, Inheritance, insurance proceeds, and Divorce Settlements, if you recieve any of those within 6 months of filing, you must report them to the BK trustee).

I find it a bit humerous that someone who just filed BK 7 is thinking of buying a boat

[familyof7]

My dad has a boat that is worth a few grand but he is old and is going to give it to me for 200 if I do indeed decide to buy it and because it is my dad I can pay when ever I want 25.00 month or whatever I have and the car is a car he dont drive any more so he is really giving it to me as long as I fix it 150.00 to fix

[demismom]

You can buy whatever you want after you receive your discharge. In fact, you can buy whatever you want the day after you file. The BK estate is created on the day you FILE your petition (all your assets and liabilities that exist on that day and prior to that day, are part of the BK estate). Any property you acquire after the day you file, is not subject to the BK (there are 3 exceptions, Inheritance, insurance proceeds, and Divorce Settlements, if you recieve any of those within 6 months of filing, you must report them to the BK trustee).

I find it a bit humerous that someone who just filed BK 7 is thinking of buying a boat

I have a question regarding this answer. If I can do anything I want after I file, why do they still want most recent paystub AND bank account statements at my 341? Why would it matter to them what I did AFTER I file, if you say is true? I'm just trying to figure this out. We filed on 6/4 and have the potential to make some significant money, but don't want to do anything to jeopardize the BK. TIA!

[HHM]

Perhaps it is different in your area (although I can't imagine why), the trustee generally only asks for the pay stub and bank statement that covers the filing date.

If they ask for most recent (i.e. most recent to 341 date), they are looking for assets you did not declare on your schedules that "would" have been part of the BK estate.

We need to make a distinction here...you can do "whatever" you want with assets you acquire and your "right" to acquire those assets arose AFTER you filed BK. There is a legal difference between "receiving" the asset, and your "right" to receive the asset. Generally speaking, BK law is designed to create the largest possible BK estate, so the BK estate does not just include assets in your possession, but all assets to which you have a "right" to possess. So long as that "right" to possess (or receive) the assets exists before you file BK, then that asset is part of the BK estate.

Prime example of this is an insurance payment from auto accident. You get in car accident on May 1st, 2007....you file BK July 1st. But you don't receive any insurance payment until November 1st. Guess what, that money you "receive" November 1st is part of your BK estate because your "right" to that payment was created on May 1st...and May 1st is before you filed BK. Tax refunds are another prime example. Your "right" to a tax refund arises throughout the tax year...but you only "receive" the money in April of the following calender year.

Distinguish those cases with your paycheck...the trustee cannot touch the paychecks you receive after you file BK because your "right" to those subsequent payments arose after your filed BK.

The 3 exceptions to this general rule are for Inheritance, Life Insurance Proceeds, and Divorce Settlements

However, I agree, that as a "practical" matter, it is always better to wait until after discharge to make any major purchases or receive any asset or property. Reason being, you don't want to give the Trustee a reason to "test" the bounds of the law.

[Minnymouth]

Well said HHM, right on target!!

[BassBoy]

Most excellent explaination HHM!