confused...

[way2go]

I had a motorcycle and truck loan through a bank which was transferred to Credit Cards about 2 years ago and the titles were issued to me.

I have sold the motorcycle and I am about to sell my truck.

A family member gave me a loan of around 10k when I was unemployed to cover living expenses while I had an apt. a little over a year ago. I am currently living with them now and wanted to know if I was to repay them this money from selling my truck and bike would it be called an insider payment?

Could I specify that I am using the money to pay them for rent and living expenses due to no income whatsoever?

[aljohnson007]

I believe so but best you get some free advice from several attorneys. Please don't make the mistake of "gaming" the system because the folks you will be dealing with have seen it all. Be careful and good luck with whatever you do.

[backtoschool]

I had a motorcycle and truck loan through a bank which was transferred to Credit Cards about 2 years ago and the titles were issued to me.

I have sold the motorcycle and I am about to sell my truck.

A family member gave me a loan of around 10k when I was unemployed to cover living expenses while I had an apt. a little over a year ago. I am currently living with them now and wanted to know if I was to repay them this money from selling my truck and bike would it be called an insider payment?

Could I specify that I am using the money to pay them for rent and living expenses due to no income whatsoever?

This sounds very much like a possible insider payment and you need to be very careful how you pay them. Talk to an attorney on how the best way to pay them would be without the money getting taken back by the trustee. Any money you pay them from proceeds of the motorcycle and truck could be taken by the trustee if you file bankruptcy within a year of paying them.

Can your exemptions cover the money? If you put the money in the bank and cover it with exemptions and then pay them a rent check each month that probably would be approved, but again check on this with your attorney as it is a very tricky situation.

[way2go]

I believe so but best you get some free advice from several attorneys. Please don't make the mistake of "gaming" the system because the folks you will be dealing with have seen it all. Be careful and good luck with whatever you do.

I'm not trying to "game" the system, I'm trying to survive without living on the street in a cardboard box with no source of income because of the economy.

I have a 760 credit score, have no late or missed payments in 7 years, never had a judgment against me, but with the economy falling apart it has left me in a real tight situation.

I'm going to speak to a lawyer tomorrow, but I was just wondering if the family who is practically supporting me financially to live and breathe right now is obligated to payments for providing me a place to stay and eat?

[backtoschool]

I'm not trying to "game" the system, I'm trying to survive without living on the street in a cardboard box with no source of income because of the economy.

I have a 760 credit score, have no late or missed payments in 7 years, never had a judgment against me, but with the economy falling apart it has left me in a real tight situation.

I'm going to speak to a lawyer tomorrow, but I was just wondering if the family who is practically supporting me financially to live and breathe right now is obligated to payments for providing me a place to stay and eat?

Payments to insiders within a year of filing bankruptcy are tricky. The trustee can go after your family for the money you pay them if this is not handled very delicately.

[AngelinaCat]

You can make arrangments to pay them rent, but you need to have an agreement in writing with them. You can make monthly payments to them; just don't make a 'lump sum' payment, and nothing over $600.00. $600.00 seems to be the 'red flag' trigger.

But as others have suggested, this is a good question for the attorney.

Good luck!

[UpsideDownMI]

If you paid them back now it would certainly be considered an insider payment. With the dollar amount involved even if the creditor was not family, the payment would be considered preferential.

If you have enough wildcard exemption to cover the proceeds you could exempt the proceeds and pay them back after you have been discharged. There is no law that would prevent you from paying back a debt that was incurred before bk after discharge.

[way2go]

If you paid them back now it would certainly be considered an insider payment. With the dollar amount involved even if the creditor was not family, the payment would be considered preferential.

If you have enough wildcard exemption to cover the proceeds you could exempt the proceeds and pay them back after you have been discharged. There is no law that would prevent you from paying back a debt that was incurred before bk after discharge.

Debtors who do not claim a homestead exemption are entitled to a total of $5,000.00 in personal property exemptions

I'm guessing this is what you are referring to.

So it would be $5,000 I could exempt, guess I really need to talk to the lawyer tomorrow and see what the best option is. I need to find out if it's based on tangible personal property or personal property such as a vehicle, business equip or real estate.

Thanks for all the responses.

[berrymom35]

We had an "insider payment" situation that went very smoothly. When we surrendered our SUV dh needed a car so my inlaws bought a $2000 truck for him to drive and we pay them every month. She has kept very good records and we provided a copy of those records to the tt and they were added to the mailing matrix and creditors list. This went through just fine. You just need it in writing and make sure it is all documented. Your lawyer can help you through this.

[OhioFiler]

Any money you give the relatives as payback (regardless how you define it) will end up in the trustee's possession.

[way2go]

Any money you give the relatives as payback (regardless how you define it) will end up in the trustee's possession.

I am past due on paying relatives rent of $4,800 and I am current with all my other creditors, I will be faced with eviction and no place to live. You are trying to tell me if I have these rent terms written and signed that it would be considered a "payoff" to pay a past due amount?


That just sounds absurd.

[StartingOver08]

OhioFiler is giving you the right info.

Remember, the Trustee is there to represent the CREDITORS! The Trustee is looking for $$$ where he can find it. The Trustee gets a commission on the $$$ he/she finds so they not only know where to look, but have an incentive to reclaim those funds for the bankrupt estate.

Insider payments are easy pickings for the Trustee's....

[whipster1]

I am past due on paying relatives rent of $4,800 and I am current with all my other creditors, I will be faced with eviction and no place to live. You are trying to tell me if I have these rent terms written and signed that it would be considered a "payoff" to pay a past due amount?


That just sounds absurd.

The trustee will get the money back from your relatives if you pay a lump sum to them. That is just how it is. Pay them back AFTER discharge, and meanwhile you can pay them a normal rent amount.