Worried that I've committed fraud prior to filing..

[OhioFiler]

WHAT????

What state are you in??

Since the spring of 2008 I have helped a relative with more than $10K toward her expenses. (Not in one fell swoop; largest check ever was $2K, but generally it was several for $300, $400, etc.) Last check was about a year ago. Is this going to be an issue??? And how could that person be expected to give that money back to a trustee when it was used to keep a roof on their heads and gas in the car?? In other words, long since spent!! She'd have to file BK herself if they tried!

And speaking of mothers, I spend probably $15-20 a month to buy items for mine (on Medicaid in a nursing home; allowed only $60 for expenses and that all goes to get her hair shampooed and set once a week.) I'm talking about buying kleenex and wipes and a few bananas and a snack that she loves...Is that expense going to be an issue??

I have not worked for two years so I can't imagine how I can be made into a Ch 13 if I file soon, but still....this is beyond insane to me what happened to you!

I've paid my mother's mortgage for her since she retired 1 1/2 years ago and my attorney never batted an eye at it.. There is even a line item on Schedule J (line 15) for such an expense.

[backtoschool]

Wow. Thanks for that information b2school.
Did you think about those checks when you did them? I mean, did you tell your attorney about it and he didn't tell you this would happen? Did you're mother have to pay it all back?

I'm wondering if my attorney will be able to tell me if we sold the camper for too little? I guess a lot will depend on what the trustee considers the value? I know we didn't sell her the camper for top retail because it wasn't worth that--at least to us. But on paper, to a trustee that wants to make a few bucks, I guess he can make it worth whatever he wants

We are expecting to get about $4-6K back from our taxes. If we can sell a house that we just listed, we should clear $8-10K. We have already decided that we are giving that money to the attorney or wherever he directs us. I had hopes of buying my car after the lease expired, but that's probably not going to happen. I may not have transportation for a while, but if I can have my life back AFTER BANKRUPTCY--I'll do it. Do you suppose the trustee will realize that we are trying and leave the camper issue alone? Or, is it worth that much time and effort to involve my mother?

I told my attorney about the checks but she didn't think the trustee would go after my mother. He did. I think he did because he couldn't find anything else to go after. I was a formerly high income filer, that waited six months to file after I became unemployed so that my income would be low enough to qualify for a chap 7. But my income tax returns showed a high income so the trustee went after me. I paid the trustee. I was not going to have my mother pay it. The trustee scared her enough by even contacting her.

If you sell the car before you are discharged, the trustee may go after the money. I personally think that the trustee will go after the camper. They are trained to look for low hanging fruit like transfers to family members. Get an appraisal regarding the hail damage, and you will at least win if your case goes before the bankruptcy judge, when you contest the trustee, but I think that the trustee will go after the camper.

The trustee will look at the bluebook or nola value of the car to determine if you undersold.

[music12]

LNF: take a deep breath. you are worried far more than you need to be. i think in your situation, you will feel much more secure if you get some letter from the insurance company saying how much the hail damage was, because then you'll know that if the trustee asks, you can just show this to him. but, see what your lawyer says first. they may think it's not important enough.

nickifan: i agree that what happend to backtoschool is totally insane. for your situation, as far as i know the look-back period for giving money to family is either 1 or 2 years. i think it depends on district. if it's 2 years, you may have to wait a year to file. as to the 15-20 a month, that probably comes to less than 200 a year, which is an allowed amount for gifts to family, so it's not something to worry about, plus you could just report it as part of your own expenses, it's seriously such a small amount of money that i wouldn't report it separately.

[nickifan]

Trustees only make $60 per case on non-asset cases. They are trained to look for transfers to family members so that they can convert the case to an asset case and make some money. I was made an asset case because I wrote two $500 checks to my mother in a year to help her with her expenses. The trustee went after my mother for the money. If you want to avoid any chance of the trustee going after your mother, you would have to wait two years from the sale of the camper to file.

WHAT????

What state are you in??

Since the spring of 2008 I have helped a relative with more than $10K toward her expenses. (Not in one fell swoop; largest check ever was $2K, but generally it was several for $300, $400, etc.) Last check was about a year ago. Is this going to be an issue??? And how could that person be expected to give that money back to a trustee when it was used to keep a roof on their heads and gas in the car?? In other words, long since spent!! She'd have to file BK herself if they tried!

And speaking of mothers, I spend probably $15-20 a month to buy items for mine (on Medicaid in a nursing home; allowed only $60 for expenses and that all goes to get her hair shampooed and set once a week.) I'm talking about buying kleenex and wipes and a few bananas and a snack that she loves...Is that expense going to be an issue??

I have not worked for two years so I can't imagine how I can be made into a Ch 13 if I file soon, but still....this is beyond insane to me what happened to you!

[LostNFound]

Wow. Thanks for that information b2school.
Did you think about those checks when you did them? I mean, did you tell your attorney about it and he didn't tell you this would happen? Did you're mother have to pay it all back?

I'm wondering if my attorney will be able to tell me if we sold the camper for too little? I guess a lot will depend on what the trustee considers the value? I know we didn't sell her the camper for top retail because it wasn't worth that--at least to us. But on paper, to a trustee that wants to make a few bucks, I guess he can make it worth whatever he wants

We are expecting to get about $4-6K back from our taxes. If we can sell a house that we just listed, we should clear $8-10K. We have already decided that we are giving that money to the attorney or wherever he directs us. I had hopes of buying my car after the lease expired, but that's probably not going to happen. I may not have transportation for a while, but if I can have my life back AFTER BANKRUPTCY--I'll do it. Do you suppose the trustee will realize that we are trying and leave the camper issue alone? Or, is it worth that much time and effort to involve my mother?

[backtoschool]

Ok. Here's an update.
I just asked my hubby what he did with the money from the camper sale to my mother. And, in my opinion, this isn't going to look good for us.

He said he used it to pay a company that was supposed to help with our credit card debt. Like I've mentioned earlier, we stopped paying our credit cards in Feb 2009. Well, we signed with a company that was going to help us with that debt (100K). I say "supposed" to help us because it hasn't worked out so well. Thats a whole new thread, so I won't get into that.

But, from what I've read, I'm worrying again because we sold our camper to get money to pay for signing with a now "bogus" credit card repair thing! Ugghhh.....

YES, I am going to tell the attorney about it in more detail. But I'm posting it here because hopefully I'll have something GOOD to add to all of this worry.

I don't think what you spent the camper money matters so much in regards to a "fraudulent conveyance". Many people try credit repair before filing for bankruptcy. That will not look out of the ordinary to a trustee. What matters is that you sold the camper for less than fair market value. What things will boil down to, is what the trustee considers fair market value for the camper. If the trustee accepts that there is $3,000 of hail damage on the camper and that that hail damage made the camper worth $3,000 less than book value, then the trustee will not go after your mother for the money. If the trustee does not believe that the hail damage made the camper worth $3,000 less, then the trustee will try to get some money out of your mother.

Trustees only make $60 per case on non-asset cases. They are trained to look for transfers to family members so that they can convert the case to an asset case and make some money. I was made an asset case because I wrote two $500 checks to my mother in a year to help her with her expenses. The trustee went after my mother for the money. If you want to avoid any chance of the trustee going after your mother, you would have to wait two years from the sale of the camper to file.

[LostNFound]

Ok. Here's an update.
I just asked my hubby what he did with the money from the camper sale to my mother. And, in my opinion, this isn't going to look good for us.

He said he used it to pay a company that was supposed to help with our credit card debt. Like I've mentioned earlier, we stopped paying our credit cards in Feb 2009. Well, we signed with a company that was going to help us with that debt (100K). I say "supposed" to help us because it hasn't worked out so well. Thats a whole new thread, so I won't get into that.

But, from what I've read, I'm worrying again because we sold our camper to get money to pay for signing with a now "bogus" credit card repair thing! Ugghhh.....

YES, I am going to tell the attorney about it in more detail. But I'm posting it here because hopefully I'll have something GOOD to add to all of this worry.

[LostNFound]

Nothing has seemed to go my way for about the last year, so I'm expecting that this will be a hang up for us.

I don't actually remember what we did with the money. I suppose we lived on it? I don't know because I didn't know I was supposed to keep track of it at that point. I'm going to have to go back through the bills and try to figure it out. I'm sure that the trustee will be able to see our bank accounts and that would most definitely show something? But I will do my best to put the pieces together. I know we haven't made any major purchases in the last year (aside from my camera equipment, but I've used money that I made from photography to do that and nothing else).

As for the profit from the house we sold....ha ha ha....We walked away from the table with $800 and we paid the tenant that lived there her deposit back of $400. So...not too much to worry about there!

I did tell the attorney all of this. But after reading comments here, I'm wondering if waiting until the end of summer would be better for us? That gives us 1.5 yrs from the sale of that camper. I'm not worried about the trustee asking me questions or looking into how we spent the money. We've been drowning in mortgage debt for so long, I'm sure it went to that. However (and I know I'm repeating myself), my BK is a very private matter and I would rather that no one knows about it until it's in the papers. And by that, I mean, My mother! I am not up to dealing with that right now...

For anyone that has gone through BK already, I'm sure you realize that I'm going to be ok. But it seems like such a BIG hill to climb. It's taken a lot time for me to get to the point of having ENOUGH of the fight and I want it all to go away. I'm anxious over the possibility that we will be a HUGE asset case and this will take a LONG time. We have too many assets...and w/5 houses....ugggh....this is going to be nightmare that won't be over for another 6-8 months (I'm guessing) and that's if we get started now!

[Flamingo]

The situation is what it is and you will need to bring it all to the attention of your attorney. Also realize that it seems your intent was to sell the items since you were "drowning in mortgage debt" which would probably show that it was not your intent to sell the items for a profit prior to filing bankruptcy. Did you use the money from these sales to pay bills? Can you show where the money went? All that will be important...best of luck to you...

[backtoschool]

I don't think fraud is involved. But, if you get a trustee that is really aggressive, he/she might try to get some money back from your mother for the camper. A "fraudulent conveyance" just means that you sold it to your mother for under market value in the last 2 years before filing. The trustee will look at the book value of the camper and then may go after your mother for the difference. Intent is difficult to prove on either side, so usually in these situations the discrepancy between market value and what your mother paid, is declared an asset, and you negotiate with the trustee. If the book value of the camper is more than what your mother paid for it that is what will be questioned. The key here will be if the hail damage really lowered the book value of the camper. Some trustee's will accept that as an explanation, and some will try to get the difference in values.

I think you can push back on the trustee though and show evidence of hail damage, etc. But that would end up on bankruptcy court in front of the judge. Property sales to family members are red flags for trustees unfortunately, and I disagree with some of the posters on this thread that the trustee will not consider the sale of the camper a "fraudulent conveyance". I think there is a chance that the trustee will go after your mother for the difference between market value of the camper and the what she paid for the camper.

Just my opinion....

[nerves]

LNF - I sent you a PM the other night in regards to one of your other threads - I will send you another with a lawyers name.

[LostNFound]

We will be filing in the Northern District. I have contacted about 4 attorneys at this point. 2 of them were definitely NOT going to work for me. It's surprising how crabby they can be!
We have narrowed the margin to 2 attorneys that we are considering. However, one is in Iowa City (which is hours away from us) and one has a couple of offices but the main one is in Waterloo. We are meeting with the one from Iowa City because he required less documentation up front to at least meet with him. The other attorney is requesting every single shred of documentation that you could imagine and I don't have it all together yet. Honestly, the paperwork is intimidating and I finally got sick of waiting.

But if you have any recommendations, I'd be willing to listen!!!

[nerves]

LNF - I don't think the house will be an issue. The camper probably won't be either as long as you have documentation what you sold it for, the estimate on the hail damage, etc. Your lawyer will probably be able to state a strong rebutal if it is questioned as long as you are up front with him. The trustee may ask a few questions about it and move on since it was at fair market value or very close. The amount of work to mess with it probably won't be worth their time due to the value. Will you be filing in Northern or Southern district? We filed in the Northern district and I don't recall the trustee even asking if we had any insider transactions, etc. I was surprised the items above exemption weren't even questioned. Our case has been discharged (02/17) and closed (02/25). The trustee asked for a copy of our 2009 tax return and it appears at this point she doesn't have any interest in it. Our lawyer will send her a copy and we will see what happens.

[DeadManCrawling]

When you are in the time before filing BK, it is sometimes ok to sell things "under duress" for not quite full market value. It is expected that you might "fire sale" some things, even to family. As long as there is an exchange of reasonable value, a term that varies in application, you are fine. Had you sold a 8k camper for 80 dollars, that would cause trouble.

Your deposit record is probably enough to back up the transaction. A copy of the check might be better.

Nothing you wrote looks fraudulent to me.

[LostNFound]

Ok, one more question....and I apologize, but I'm just trying to think ahead.

How do I PROVE that my mother paid for this? Do you think the deposit into my bank about that time is enough? She actually wrote me 2 checks for $2000 about 1 month apart. I don't have those, but I know we would have deposited into our bank account. Again, not trying to get ahead of myself, but I don't want her involved at all. It seems like her "understanding" of our financial situation wavers from sympathetic to angry.

I'm also wondering if I should get documents from the insurance company to prove the hail damage?

Maybe the trustee doesn't care about going that in depth...but I want to be prepared and we have SO MUCH to worry about. With 5 rental properties...I can only imagine how long this is going to take to finalize.