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Loans versus Gifts

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    Loans versus Gifts

    I asked this somewhere but nobody saw it so I thought I'd try a new thread. I want to be absolutely sure about this so I don't put any friend at risk.

    My lawyer said that gifts count as income, loans don't.

    Therefore money I borrow to pay the lawyer needs to be loans, right?

    Also, returning a loan before BK will make the other person liable, so loans can only be returned after BK. Right?

    I also read somewhere here that you should wait after BK a year before you return loans. Is this true?

    #2
    Your lawyer may be a bit cautious if, you're close on the means test.
    You might ask your benefactor to just write a check directly to the lawyer and bypass your account. A one time gift of a legal fee ought not to cause any problems.
    Once the bk is discharged and closed, you may repay anyone you please.You don't need to wait a year.
    You get into preference issues if you repaid an insider within a year before you filed.

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      #3
      Thank you!

      Comment

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