Can they touch money that family gives to support you?

[justbroke]

Do you mean even if the account isn't in my name?

If it's not in your name, then it's not your money. However, the Trustee will ask, at your 341 Meeting, if anyone else is holding on to property for you. I would err on the side of caution and make sure that account has very little money in it on the day of your 341 Meeting. This is actually a standard practice anyhow.

[bkmaggster]

Do you mean even if the account isn't in my name?

No, the trustee cannot touch money in a family member's account, unless it was the result of preferential loan payments you made to them. Which it isn't, so they can't touch it.

[backtoschool]

Do you mean even if the account isn't in my name?

Since your family is directly paying your bills from an account not in your name, I don't think that your situation is a problem. I don't think the money will be counted as income.

[backtoschool]

The reason I never jumped into this thread, was because it never reaches your hands. It is used for housing/living expenses and it may not even be, technically, income as per the definition in the Bankruptcy Code.

My reason for posting is to distinguish taxable income versus what Bankruptcy considers income. The Bankruptcy Code makes no distinction. As written above, the Trustee may take a "gift" explanation, but rest assured, if that amount is significant... the UST will become every interested in that income... if it's still sitting in an account.

Yes I totally agree. Every time I got a "gift" check, I could show receipts for a necessary expense it was spent on.

[sirius]

... the UST will become every interested in that income... if it's still sitting in an account.

Do you mean even if the account isn't in my name?

[backtoschool]

I was going to jump in earlier and say that, for the purposes of the Bankruptcy Code, all money received regardless of source or tax status is income for the purposes of the Means Test.

Sorry, but that's just what it is. It is part of your "current monthly income" (CMI) as defined in 11 USC 101.

Your lawyer is apparently not a tax attorney. While the first $13,000 that is gifted to a person is non-taxable, it is indeed income. It's just exempt from taxation. As far as the Bankruptcy Code is concerned, lack of a taxation status does not preclude the monies from being part of the current monthly income calculation.

There is a difference between your family paying your electric bill every once in a while, and your family giving you $13K in cash.

Point well taken. In my case, I was well under the median, so the means test was not an issue. My bankruptcy attorney definitely is NOT a tax attorney, lol, but she was pretty sure that the money was not an issue as long as it wasn't a loan. She's the one that used the $13,000 standard. In my case it was irrelevant, since I was under the median and the $13,000 would still keep me well under the median.

And I agree, you are definitely the expert. Your posts help me a LOT.

[justbroke]

Just to be clear, right now the money does not come to me. It gets deposited in another family members account and bills are paid directly from there.

The reason I never jumped into this thread, was because it never reaches your hands. It is used for housing/living expenses and it may not even be, technically, income as per the definition in the Bankruptcy Code.

My reason for posting is to distinguish taxable income versus what Bankruptcy considers income. The Bankruptcy Code makes no distinction. As written above, the Trustee may take a "gift" explanation, but rest assured, if that amount is significant... the UST will become every interested in that income... if it's still sitting in an account.

[bkmaggster]

My brother who lives out of state sends money to my familiy which they deposit and pay my bills with.

The way I read this is that the OP never receives this money. It goes into his family's (parents?) account, and a family member pays OP's bills.

If the money never touches the OPs hands or account, how could it possibly be counted as income?

[sirius]

Thanks for the help. Even though I'm even more confused now

Just to be clear, right now the money does not come to me. It gets deposited in another family members account and bills are paid directly from there.

It's well under 13k a year.

Right now it's almost all used for bills, but if I stop payment I'll have quite a bit more. If that happens should I just have my family cash it and give it to me?

[AngelinaCatHub]

SEE. He arrived. Thank you. LOLOL. 'Hub

[AngelinaCatHub]

My lawyer told me that it is not income up to $13,000, because the irs does not count it as income up to $13,000. Now if that amount puts the user over the median on the means test, then maybe the issue of income would come up with the US trustee, but my lawyer said that people filing for bankruptcy get cash help from family members all the time and that most trustees use the irs standards as to how much of that is income, since usually the money is spent before the 341 anyway.

Now we are probably splitting hairs here, since the OP sounds like they are under the median income anyway, since the family "gifts" are the only source of income.

In my 341, my trustee asked me about each check that my family or boyfriend gave me, and I just said it was a "gift" and he moved on. He did try to find out if it was a loan, but he did not try to make it income.

I agree. Just attempting to be accurate and remember, I've been burned by ignorance, so I am a little hyped on accuracy. I've called in an expert on this soon to show. LOL. The Op does not need to worry, but I like 'Chowders' suggestion. It seems the safest. 'Hub

[justbroke]

I was going to jump in earlier and say that, for the purposes of the Bankruptcy Code, all money received regardless of source or tax status is income for the purposes of the Means Test.

Sorry, but that's just what it is. It is part of your "current monthly income" (CMI) as defined in 11 USC 101.

My lawyer told me that it is not income up to $13,000, because the irs does not count it as income up to $13,000.

Your lawyer is apparently not a tax attorney. While the first $13,000 that is gifted to a person is non-taxable, it is indeed income. It's just exempt from taxation. As far as the Bankruptcy Code is concerned, lack of a taxation status does not preclude the monies from being part of the current monthly income calculation.

There is a difference between your family paying your electric bill every once in a while, and your family giving you $13K in cash.

[backtoschool]

Yes, but it is still income in a bk case. That would be a very large income and could be taken in payment by the Trustee.

Hey! I've been wrong before, so if someone has better info than I, I will concede. LOL. 'Hub

My lawyer told me that it is not income up to $13,000, because the irs does not count it as income up to $13,000. Now if that amount puts the user over the median on the means test, then maybe the issue of income would come up with the US trustee, but my lawyer said that people filing for bankruptcy get cash help from family members all the time and that most trustees use the irs standards as to how much of that is income, since usually the money is spent before the 341 anyway.

Now we are probably splitting hairs here, since the OP sounds like they are under the median income anyway, since the family "gifts" are the only source of income.

In my 341, my trustee asked me about each check that my family or boyfriend gave me, and I just said it was a "gift" and he moved on. He did try to find out if it was a loan, but he did not try to make it income.

[Chowder]

Right now my family supports me.

My brother who lives out of state sends money to my familiy which they deposit and pay my bills with.

If I have to stop payment on my cards can this money be gone after or considered income in any way? Currently there is some left over after bills, but if I stop payment their will then be more. At that point though I could just have the family cash the checks then.

I don't really know if their are any issues to worry about here, but I figured it was good to educate myself in case.

You could get some loony trustee. The way around this is to have family members pay bills directly. No money moves through your account.

[AngelinaCatHub]

I agree. You can get "gifts" from family up to the irs standard of $13,000 a year. This is what my attorney told me.

Yes, but it is still income in a bk case. That would be a very large income and could be taken in payment by the Trustee.

Hey! I've been wrong before, so if someone has better info than I, I will concede. LOL. 'Hub