Another Christmas gift question....what to do about cashing checks....

[forgotten]

- No "merchandise credit." The debtor is not the purchaser. On what authority? The guy who brought it into the store? Not likely.
- No "cc refund." The debtor is not the purchaser. On what authority is the product being brought into the store?

How does the refund Clerk know that you have not "lifted" the item from her? Happens all the time, especially if the new-found benefactor has to feed a meth habit. (You see the problems).

You realize they don't care, right? Have you ever returned anything in your life? They could care less if you have the right to return it or not. If you have the receipt or they can look it up and you are in the return window you can return it. Its not the clerks jobs to determine the rightful owner of an item before accepting it as a return.

I am not going to beat this to death; Hub, forgotten, broke, et al can take whatever view they like. My comment is: if grandma wanted to establish an iron-clad gift transaction, then she would have issued a check, made out jointly to "Son-in-law and BestBuy," let the in-law sign it, and have the store accept it as funding for the item.

In the alternative, grandma could have issued the check to the in-law, and let him do as he pleased. [Then it would be "income."].

In the alternative, grandma could have written a Christmas Card that read in substance: "Enjoy your new TV, serial no. 770356147. It is my gift to your family for Christmas."

No one does that.
The bankruptcy judge rules based on preponderance of the evidence, while your arguments MAY be enough to avoid federal criminal charges based upon the higher standard of reasonable doubt you are going to find yourseld in a poisition of having your case dismissed and being unable to refile.

[JustFileSuit]

Me too.

And you're the same fellow who suggested that when the debtor returned the TV to BestBuy, they would issue a credit to grandma. How could they do that, if the debtor is the new owner?

See, there is your problem. The counterparties to the original transaction do not view the matter as you do. The view you have is the one that is convenient to you at this point in time. Yet the "gift" is an unperfected transaction. Nobody has memorialized it. And therein lies the problem.

Memorializing the way the property ended up in the hands of the Debtor sets forth what the parties did - or did not do.

[JustFileSuit]

[QUOTE=forgotten;362115]

You realize they don't care, right? Have you ever returned anything in your life? They could care less if you have the right to return it or not. If you have the receipt or they can look it up and you are in the return window you can return it. Its not the clerks jobs to determine the rightful owner of an item before accepting it as a return.

And guess what? the Debtor's name is not on the receipt.

No one does that.

And that is exactly why you end up with problems down the road.

The bankruptcy judge rules based on preponderance of the evidence,

You are assuming that someone is bringing an adversary proceeding challenging the item. Nobody is there yet. What the Debtor is doing is setting forth gaps in the paper trail. He should do that. That is a sign of carefully researching who owns what - his responsibility as a Debtor before the Court. If somebody else disagrees, let them file an AP.

while your arguments MAY be enough to avoid federal criminal charges based upon the higher standard of reasonable doubt you are going to find yourself in a position of having your case dismissed and being unable to refile.

Come now. You are setting forth a proper accounting of the goods. You present that to the Court - part of your package. Now you want to argue that that creates a liability to have the case dismissed with prejudice? Do you have any real idea of how incredulous this posture is?

What the debtor is faced with is a murky situation. JustBroke says it is a "gift," so therefore it belongs to the Debtor. Then two paragraphs later JustBroke suggests that the item, previously a "gift," should become property declared as not the debtor's. Huh?

Now you chime in that "nobody does that." Sure, with a pair of men's underwear or a sweater. How about all the furniture in grandma's home when she gets moved into the nursing home and has dementia? See, that is where the problems start - when there is property of substantial value. Now JustBroke chimes in that he is going to go issue Certs for 200K of gifts over the years. Preposterous. The impact of documentation is a function of time and value. And if JB had 200K given away, then there is something wrong with financial probity to end up in the USBC.

What you fellows have not recognized, and refuse to recognize, is that here we have an unperfected transaction. Sorting it out is what the Debtor is obliged to do.

I am done with this issue. You fellows can carry on till the end of time; the Debtor can weigh the thoughts and use his own judgment.

[justbroke]

And you're the same fellow who suggested that when the debtor returned the TV to BestBuy, they would issue a credit to grandma. How could they do that, if the debtor is the new owner?

It was mom, and the terms of a return policy have nothing to do with ownership. I will, however, let you argue about whether the credit card that Mom used granted a PMSI in the items purchased, and whether the security interest followed the merchandise, but that's not what you're talking about. You are basically saying that store policy overrides law.

Yet the "gift" is an unperfected transaction. Nobody has memorialized it. And therein lies the problem. Memorializing the way the property ended up in the hands of the Debtor sets forth what the parties did - or did not do.

Our country and government would come to a screeching halt if every gift needed to be "memorialized" as you put it. Have you used these lines on a friend/family member before when you took a gift back from them? Just wondering where the basis comes from, or is this just theoretical?

I'm also wondering if you can cite several cases where a gift was "not memorialized" so was not property of the debtor. I would love to read several of them, since I like to go by caselaw/commonlaw.

What the debtor is faced with is a murky situation. JustBroke says it is a "gift," so therefore it belongs to the Debtor. Then two paragraphs later JustBroke suggests that the item, previously a "gift," should become property declared as not the debtor's. Huh?

Absolutely false. I asked you to clarify or somehow rectify your inconsistency. If we use your "just file a UCC-1", then the Mom is a secured creditor and must be listed as a creditor.

Some of what you write has merit when and if this was done in anticipation of purchasing something for someone else. Not after the fact. If you do this, as suggested, after the fact, that is materially fraud (period). If you had stayed with just saying "if your Mom, before purchasing, agrees to file a UCC-1 (which you have to sign)... then Mom still owns it. You would need to list mom as a secured creditor...".

However, you want to stick with this obviously flawed idea that you can change the terms of the "gift" after giving it.

I would love to see supporting caselaw, that a transaction can be changed from unsecured to secured without any new consideration... after the fact.

[Meatstick]

So we met with the lawyer once again yesterday morning. I told him what my mother had gifted to us and he stated that even though it was gifted to us that we now had to list it as an asset. He instructed us to list it at 25% of its original value.

I also told him that I had heard of references to using a UCC-1 filing with regards to these types of gifts. He took off his glasses and told me that the UST would have a field day. He said trying that stunt would only invite the UST to "bust your balls" for anything and everything he could think of. He just basically pounded it home that only someone trying to hide something would even think of that.

Just relaying the message.


Meatstick

[justbroke]

So we met with the lawyer once again yesterday morning. I told him what my mother had gifted to us and he stated that even though it was gifted to us that we now had to list it as an asset. He instructed us to list it at 25% of its original value.

Exactly, as this is the law.

I also told him that I had heard of references to using a UCC-1 filing with regards to these types of gifts.

I applaud you for having the guts to even ask an attorney if filing a UCC-1 was "legal".

He took off his glasses and told me that the UST would have a field day. He said trying that stunt would only invite the UST to "bust your balls" for anything and everything he could think of. He just basically pounded it home that only someone trying to hide something would even think of that.

Exactly. I'm quite sure he said something about "don't believe everything you read on the Internet". While my own personal posts come with the disclaimer that I'm neither an attorney nor providing legal advice, I will, at least, post relevant caselaw that supports my position. In that way, you can have a coherent discussion with your attorney.

C'est la vie!

[DeadManCrawling]

This has been an amusing read on Christmas Eve.

I am sick with a cold or flu, and needed something amusing. This fit the bill exactly, with due respect to the OP.

I suppose the whole UCC thing, done in advance, would be PERFECTLY LEGAL. And even DEFENSIBLE. From a purely academic, legal standpoint.

My mind spun as I recalled my trustee meeting the other day. While this kind of behaviour might be absolutely legal, the trustee we had would have gone absolutely bonkers over such an incredibly silly and intricate move to protect an almost worthless TELEVISION and DVD PLAYER!

This, legal though it may be if done right, would have caused our trustee to dive into EVERY LINE of every account, every asset, order appraisals in cases where she would not have otherwise. And so on.

I bet EVERY BK case, if you look hard enough, presents issues of one sort or another. This trustee would have tore the case apart and found every single one. Because the debtor had been foolish enough to attempt to shield a mere TV with an intricate legal maneuver. She would surely be wondering "what else" was being concealed.

Thank you for the laughs! I needed this.

[justbroke]

Glad we could assist you on this Christmas Eve, sir Dead Man Crawling. I hpe that you start feeling better. The kids keep bothering me about presents early. I'm tying to get them to go to sleep now. I have to "sneak" around and install a new desktop computer when they're sleeping. (I installed an XBOX 360 last Christmas right under their noses and they never noticed it sitting in the entertainment rack until I pulled out an XBOX game and said... "let's try this one"!)

[DeadManCrawling]

I have a lot of audio equipment in my home. For one aspect of my job.

When my son was 7 or 8, I "bought" him a goat.

We took him to the movies, and I announced the gift of goat on the trip home. He had several friends with him. They were excited-and scared.

Why a goat? Why not? Nothing fits in better in a strict, semi-upper class, suburban HOA than a goat on the front lawn right?

As we entered the house, you could hear this goat, going absolutely NUTS, rushing around, tearing up things, making a tremendous racket.

We got into the great room, and his grandpa (who was SUPPOSED to keep the goat in good order and under control), was shouting that the goat had gotten away. It was now upstairs.

I asked the kids (all 7-8 year olds, mind you), to go corral the goat.

No dice. They kept looking at each other and making dares to go get this animal. After a few minutes of the goat thrashing about, grandpa shouting, and me trying to get together the goat posse, I grabbed my son and pulled him up the stairs.

The goat sounds, of course, were coming from about 2000 watts of sound gear. It was a real goat. At least on tape. Or I should say, WAV file.

As we approached the door, he saw the real prize. An X-Box 360 or PS2 or whatever was out that year, same as your gift for your kids.

I just found an interesting way of packaging it.

He and his friends (and all of us) laugh about it to this day. It was a hoot. Or a bleat. Or whatever that sound is that goats make.

Best,

-dmc

[JEM]

Just an update to how my original question turned out...

My mom sent the kids cash and they already have plans on how they'd like to spend it. I'm sure whatever toys my kids pick will not be anything the trustee would like. Unless she wants a really large Build-A-Bear collection, that belongs to my 7 yr old daughter.

The only check my mom sent was for me and my husband, a check for $200. I will just cash that.

It's funny, my mom never sends cash, this year she did. And somehow that lifted a small weight off my shoulders. In the back of my mind, I was worried about the "big" check being cashed or deposited.

[justbroke]

Merry Christmas JEM!

[JustFileSuit]

See? Moms are smart! She probably knew more than she let on.

Here's another thought for moms. If you are going to attempt to preserve some assets, then Mom can also make a payment on that asset to reduce your indebtedness, on your behalf, and that does not screw up your income or expenses and does not qualify as a preferential payment over other creditors. She can even take over some items.

For example, say you are approaching the BK Filing date, and yo0u really, really need that auto, and it would be "gone" in your filing - you cannot support it. So Mom enters into a transaction with you whereby she pays off the finance lien and you and she sign a substitute finance lien, which gets recorded on the Title as a new first lien. Sure, you have to record the transaction with the Trustee, but if it is for equal value the trustee is not going to care (family or no family). they raise eyebrows when the base amounts start to change. Now you pay your Mom, and she is going to be a lot easier to deal with than the finance house you had before. Mom is not going to hassle you with a repo truck at 2 AM. And if your BK Filing collapses and gets dismissed, your auto still remains out of reach of the other creditors. Always nice.

You can even do this inside a BK Petition, but then you need to do it by Motion and get the Court's approval. You file a Motion to substitute creditors, outline the transactions, and serve the Trustee and the US Trustee. (Nobody cares). Typically the Court simply approves it on Short Calendar without a Hearing, as long as nobody files an Objection.

[helpmeout]

See? Moms are smart! She probably knew more than she let on.

Here's another thought for moms. If you are going to attempt to preserve some assets, then Mom can also make a payment on that asset to reduce your indebtedness, on your behalf, and that does not screw up your income or expenses and does not qualify as a preferential payment over other creditors. She can even take over some items.

For example, say you are approaching the BK Filing date, and yo0u really, really need that auto, and it would be "gone" in your filing - you cannot support it. So Mom enters into a transaction with you whereby she pays off the finance lien and you and she sign a substitute finance lien, which gets recorded on the Title as a new first lien. Sure, you have to record the transaction with the Trustee, but if it is for equal value the trustee is not going to care (family or no family). they raise eyebrows when the base amounts start to change. Now you pay your Mom, and she is going to be a lot easier to deal with than the finance house you had before. Mom is not going to hassle you with a repo truck at 2 AM. And if your BK Filing collapses and gets dismissed, your auto still remains out of reach of the other creditors. Always nice. .

Uh, in the paperwork that my attorney sent me, it specifically asks if I transfered ANY assets to a relative in the past year. It also mentioned that any lies on the paperwork is perjury.

Not to mention that what you suggested above just smells like deliberate fraud to me.

[justbroke]

If JustFileSuit is an actual asset protection attorney, then what he suggests would be based on some legal standing, or his understanding or caselaw. As such, I wouldn't discount a professional's opinion on the matter.

I refrained from making any comments on the "have mom pay down secured debt", because first, secured debt payments are not preferential, ever... and second, even if mom paid down the debtor's unsecured debt, it would still not be a preference. Now, I would consider it income, but that's another whole story.

[keepmine]

The best way for Mom and other family members to help a child on the cusp of bk is, just stay out of it.
Let what happens happen and then post bk, step in to help with financing a car or whatever else you need to do.
Don't involve others in your financial problems.