Spending Inheritance before filing! Car Lease?

[chpxiii]

If they get the "cash in hand" before they file, as with any money, they can spend it, make it exempt (i.e. open an IRA) etc.

Understood! Thank you for the clarification.

[nazstar]

If they get the "cash in hand" before they file, as with any money, they can spend it, make it exempt (i.e. open an IRA) etc.

With us, it's a large bonus from my employer that we were concerned about. We would be collecting it 6 months prior to filing and the lawyer told us we couldn't just spend it on anything we wanted because it might piss off the trustee. So, he said that we could spend it on necessary living expenses, car repairs, etc. But, we couldn't just withdraw it and go on vacation, or do anything else that could be seen a dwindling of assets. That means, I have to get really creative with this cash and use it wisely to pay what I can in those 6 months - stockpile pampers, formula, groceries, get all dental work done, get all the vet checkups done, cars tuned, pay car insurance for 6 months, renter's insurance for the year, etc. I might try to pay the IRS a chunk too. Applying to our debt makes no sense whatsoever as it would be a drop in the proverbial bucket.

[pa308]

If they get the "cash in hand" before they file, as with any money, they can spend it,

How does this play into the question have you paid anyone 600.00 or more in the past yr?

[HHM]

If they get the "cash in hand" before they file, as with any money, they can spend it,

How does this play into the question have you paid anyone 600.00 or more in the past yr?

The $600 question is not, have you paid anyone, its, have you paid any creditor over $600. Purchasing items, and paying creditors are different things. You can, in anticipation of bankruptcy, go spend $1,500 on dental work, and no one in the BK system is going to bat an eye.

[Bankruptcy Atty]

Question?

My wife is soon to inherit some money from her father's estate. We have not filed yet, but will be soon after the holidays. We are in need of another car to replace our 1991 Ford Tempo that seems to be on it's last leg.

If we can find a dealership or finance company willing to lease us a car, could be buy down the lease payment with cash up front from her inheritance? We can't afford too much of a payment, and paying down the lease would not create equity in the car, just less of a payment per month. When we file, would there be a chance the car would be taken back by the dealership or finance company? Would this be what they call turning non-exempt property into exempt property? Any help is greatly appreciated!

YOU LIVE IN OHIO? HOW MANY IN YOUR HOUSEHOLD AND WHAT IS ANNUAL GROSS HOUSEHOLD INCOME?

[CindyLou]

6000 will go faster than you know!! And remember you are also paying tax title and license on a new car, thich does not bring down the equity. By the time someone puts down 5 0r thousand on a new car, subtracts taxes, etc and drive it off the lot, you are almost, if not upside down!!!!! You could check edmunds for the current value of any new car you are looking at to see what the drive off value depreciates to, but I think you'll be real close, especially with your exemption!

Do the math and see!

[backontrackOH]

Thanks everyone for your advice and opinions! To answer the question from Bankruptcy Atty, I have 5 in my household and my AGI is around $55K/year. I am the only wage earner. My wife is fighting cancer and is a stay at home mother for at least the next year.

[emoney]

After much research I have found that leases are not a good direction for using a car. They for starters are drafted ton favor the leasors. What happens if your mileage or use changes?

The best advice I can give is to stay away from leasing a car or truck.
regards,
emoney

[nazstar]

The $600 question is not, have you paid anyone, its, have you paid any creditor over $600. Purchasing items, and paying creditors are different things. You can, in anticipation of bankruptcy, go spend $1,500 on dental work, and no one in the BK system is going to bat an eye.

I have to go back to my attorney on this one. I asked him if I could spend my bonus and he said to be really careful. For instance, I asked him what would happen if I took my family on a vacation for a week and paid for it in full and he said "no - it's seen as a dwindling of assets - bad faith". And that's something that would be done 6 months prior to filing! I would love to spend that money on somethings that we will need but won't be able to afford after filing like a new patio set, etc.

Makes me wonder what the trustee would do anyways. If I had a lump sum of money and blew it all and then 6 months later, I file for Chapter 7, what could be done about it? Money is gone... I'm just too chicken s&$t to find out!

[bkbkbk]

If they get the "cash in hand" before they file, as with any money, they can spend it, make it exempt (i.e. open an IRA) etc.

This is true even if you owe a lot of credit card debt and stop payments in anticipation of filing bankruptcy? i.e., if you have all that cc debt, but get your hands on a few thousand dollars in non-borrowed cash, it's okay to spend it on items that can be made exempt instead of paying your creditors before filing bk?

[HHM]

I have to go back to my attorney on this one. I asked him if I could spend my bonus and he said to be really careful. For instance, I asked him what would happen if I took my family on a vacation for a week and paid for it in full and he said "no - it's seen as a dwindling of assets - bad faith". And that's something that would be done 6 months prior to filing! I would love to spend that money on somethings that we will need but won't be able to afford after filing like a new patio set, etc.

Makes me wonder what the trustee would do anyways. If I had a lump sum of money and blew it all and then 6 months later, I file for Chapter 7, what could be done about it? Money is gone... I'm just too chicken s&$t to find out!

If you spend it on things you "need", its not a big deal. Vacations are the BIG-NO-NO in anticipation of BK. But going to doctors, getting your dental work up to date, getting car maintanence, etc, are all things you can do.

[nazstar]

If you spend it on things you "need", its not a big deal. Vacations are the BIG-NO-NO in anticipation of BK. But going to doctors, getting your dental work up to date, getting car maintanence, etc, are all things you can do.

Ahhhh. Okay. Then I'm gonna stick to the original plan:
-tune up for my car.
-full vet checkups/shots for the doggies.
-dental work for hubby
-crib, stroller, and other items for new baby on the way.
-then I'm just gonna stock up on pampers, formula, baby food, wipes, prescriptions, toilet paper, paper towels, etc. I've got a HUGE walk in closet that's empty and waiting for that stuff.
-patio set (ok - not a necessity but we're eating off the ottoman at this point - we don't even have a dining room set)