Will this look bad when filing?

[desperate&broke]

I question this only because I don't want the BK courts to think of it as a way of hiding money.

I have a 2 year who is cared for by my mother. She has been taking care of her since she was born and I came back to work. I pay her on a weekly basis. It's not much but can it be questioned? I pay her only 100 bucks a week via check to keep a paper trail.

Would the courts question it because she is my mother?

TIA for any replies.

[jennordhavn]

I don't see why it would be questioned

Many people have their parents care for thier little ones. As long as you have canceled checks, I don't think it would be a problem. Plus, it doesn't ask the provider's name on the forms, just the amount. I would list the amount and if a question arises, just explain it and say you have canceled checks showing how much/often you pay your mother.

[FreshLikeADaisy]

Actually, there is one thing...

On Form 7, question 3(c) reads as follows:

c. All debtors: List all payments made within one year immediately preceding the commencement of this case to or for the benefit of creditors who are or were insiders. (Married debtors filing under chapter 12 or chapter 13 must include payments by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)

Given that your mother is an insider, the trustee will want to know about a $400 per month payment arrangement. I would strongly encourage you to consider including it here. The way I would list it (your attorney can better advise you, I'm sure) is under "Amount Still Owing" I would say "ongoing child care expenses, $100/week, since March 2002" (or whenever the arrangement started). This has the effect of disclosing the payments while simultaneously making it clear you're not hiding assets through your mom. Then, if asked, you can produce your paper trail of canceled checks to prove that this arrangement did not begin the day you started thinking about bankruptcy.

Everything I've read tells me that they take any payments to insiders very seriously because that's where a good portion of asset hiding occurs, so I'd err on the side of including it here instead of waiting for the trustee to find out by some other means (like the trustee looking at your bank statements and asking, "What's this recurring charge for?") and then it looking like you were trying to hide it.

I'm not an attorney, so don't take this as the final word. But this is how I would handle it. Good luck!

P.S. Jennordhavn, I *love* your picture.

[jennordhavn]

On Form 7, question 3(c) reads as follows:

c. All debtors: List all payments made within one year immediately preceding the commencement of this case to or for the benefit of creditors who are or were insiders. (Married debtors filing under chapter 12 or chapter 13 must include payments by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)

Given that your mother is an insider, the trustee will want to know about a $400 per month payment arrangement. I would strongly encourage you to consider including it here. The way I would list it (your attorney can better advise you, I'm sure) is under "Amount Still Owing" I would say "ongoing child care expenses, $100/week, since March 2002" (or whenever the arrangement started). This has the effect of disclosing the payments while simultaneously making it clear you're not hiding assets through your mom. Then, if asked, you can produce your paper trail of canceled checks to prove that this arrangement did not begin the day you started thinking about bankruptcy.

Everything I've read tells me that they take any payments to insiders very seriously because that's where a good portion of asset hiding occurs, so I'd err on the side of including it here instead of waiting for the trustee to find out by some other means (like the trustee looking at your bank statements and asking, "What's this recurring charge for?") and then it looking like you were trying to hide it.

I'm not an attorney, so don't take this as the final word. But this is how I would handle it. Good luck!

P.S. Jennordhavn, I *love* your picture.

I guess it might be better to do it this way to CYA. But I don't really see daycare as a "creditor," it is just a regular expense. But if it is disclosed in this manner, they definitely can't say you were trying to hide anything.

Thanks for the compliment (my DF found that pic and I thought it was great)!

[FreshLikeADaisy]

I guess it might be better to do it this way to CYA. But I don't really see daycare as a "creditor," it is just a regular expense. But if it is disclosed in this manner, they definitely can't say you were trying to hide anything.

That was my thought too. I don't see it as a "creditor" situation either, not in the typical sense. It's just that left unexplained, $100 a week to mom could mean salting cash away, and those regular $100 payments are all over her bank statements so even the simplest audit would bring them up. So CYA is definitely what I had in mind, to prevent the accidental discovery of what could look like asset hiding and to protect her if she's one of the lucky chosen people to be audited.

I'm using (among other things) the Nolo book in order to file pro se, and it seems like every other page the author says something to the effect of "Don't leave it out, include and explain, because the trustee will sort it out later if he needs to. Don't worry about perfect paperwork, worry about including everything and being completely honest." (My paraphrase, of course.) Kinda put the fear of God into me.

[Runnin on empty]

I'd go ahead and list it. Heck, in my neck of the woods, $400 a month for daycare is a STEAL, so I really can't see the trustee faulting it as long as you are honest. You can't touch a decent daycare around here for under $800 a month.

[desperate&broke]

Thanks everyone! You guys are truly helpful!

I was actually planning of telling this to the atty. I have no reason to lie to anyone KWIM? I would hate for it to come back and bite me in the rear!