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Income question & payment question.

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    Income question & payment question.

    We filed Ch 7/no asset the end of December 2005 and I have some questions that I hope can be answered so I know what to expect. We met with our attorney in November and his question was "why did you wait so long to file?". I had never realized how deep we were in until I saw everything on paper. Our means test showed a disposable income of $88.00(without paying all of our debts & -$240.00 with paying all of our debts) but we had also made a hardship withdraw on my 401K to pay back secured & unsecured debtors. This was in the middle of December (yes we were desperate & NONE of the money went to Christmas presents!!!!)

    Here are my problems, one of the unsecured creditiors that we paid back was money to my parents (they are listed on our schedule) as we had not made a payment to them for 6 months and desperately needed to give them something (the amount was 4K paid and we still owe them money),when we filed our taxes, due to our hardship withdrawl they obviously used that as income which increased our month of December, and I forgot to put down that an automatic deposit from my child support (direct deposited into my savings account in my home town 3 hours away) goes into my childrens education fund (my name is not on the accounts only my fathers & it has been that way since they were born).


    I need to know if they can say that my payment to my parents was fraud, even though we paid everyone else when we weren't paying them, if they can increase/change our means test with the hardship withdrawl, and what can happen about the $25.00 that goes into my childrens education fund each month. If the trustee takes our tax refund he will get 7K from Federal & 150 from State. I have talked to our attorney but I am still nervous. Our 341 is supposed to be this week & I am nervous about what can happen. Can someone please help?? Thanks!!


    Filed 12/30/06
    341 3/24/06
    Discharged 5/15/06
    Closed 1/22/07

    #2
    What kind of comments did your attorney make regarding these issues? The payout to the parents, the kids trust fund?

    The payout to your parents is considered an "insider payout" and is not allowed in bankruptcy. More than likely the trustee will demand it back to pay the creditors and not your family (even though they are a creditor).

    What did your attorney say about things??
    Minny

    "It's amazing the paths that our feet sometimes follow in life".

    My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

    Comment


      #3
      Our attorney was VERY upset with us about the withdrawl & paying my parents. We didn't talk to him about it until after the fact. He told us the trustee would probably demand us to pay it back also. My kids' funds we will have to discuss just prior to our 341. If I have to pay that money back that is not a big problem as it doesn't amount to a huge amount. The other money we are worried about!!! We never even considered it an "insider payout" as they are as much entitled to money as anyone else!!!

      Will they consider our tax return as part of that money since it is such a big sum? Our attorney told us it will go to the Trustee more than likely.


      Filed 12/30/06
      341 3/24/06
      Discharged 5/15/06
      Closed 1/22/07

      Comment


        #4
        Yes the trustee has access to your tax refund............ unfortunately.............

        Sounds like your going to get blasted all the way around on this one.....

        Let us know what your attorney says and what happens at your 341.

        Good Luck....
        Minny

        "It's amazing the paths that our feet sometimes follow in life".

        My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

        Comment

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