First off I live in georgia i recently went through a very nasty divorce where my credit was ruined. Prior to the divorce i discovered that my wife or ex wife had ran up my credit cards to the max. I have a rental house that I have owned since 99 it has around 15 to 20k in equity in it. The tenant that lives there wants to buy the home which would give me around 15k 5k of which has to go to the ex. Should I sale the property now and wait to file or should i file and hope that I can keep the property aswell as my primary home which has zero equity. If I decide to sell the property before ch7 and not use the money to pay back creditors how long will I have wait to file chapter 7 without getting into trouble about the 15k ? Basically I lost around 26k in income this past year and borrowed around 8-10k from my grandfather and really want to pay him back plus I still owe money to my divorce attorney.
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The issue will be, if you use the money to repay an insider. The trustee can go back up to 2 years and reclaim that money. They can sue your grandfather for the return of the funds. -
Plus if you give 5K to the ex-wife, she might be considered an 'insider' as well depending on what and how the divorce settlement is. Paying the divorce attorney probably would be okay, but you need to talk to a GOOD BK attorney about this....."To go bravely forward is to invite a miracle."
"Worry is the darkroom where negatives are formed."Comment
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Another point to think about is that if you sell the house the proceeds will count against you as income on the means test until six months have lapsed, even if you sent every dime to your creditors. Any payments over $500 made within 90 days of filing would be reclaimed by the trustee for the BK estate (further complicating things). As keepmine said, trustees usually ask "Have you sold or transferred assets in the last two years?".Comment
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