$22,000 Gift From In Laws - What to do?

[IambrokeinGA]

My wife and I filed on 9/27 and our 341 hearing was 10/27. If all goes well we will be discharged by the end of the year. I have read and read on here about monetary gifts but I am getting conflicting information from my lawyer so I wanted to throw the question out to this forum. I feel like my lawyer does not know all the laws so I am looking for some other help.

Over Thanksgiving my in laws gave to us 2 checks for $11,000 each. They are unaware that we are filing BK. Before the holiday we suspected that we were going to get something from them so I had asked my lawyer if we could accept these. His response was that this would need to be reported to the trustee because it is within 180 days of filing. I then asked if these were given to us to fund our children's 529 account would that be ok and he said that would be fine as long as the memo on the check mentioned that the money was for college.

So my wife and I are unsure of what to do. What I keep reading on here is that if it is a gift it is yours to keep but if it is inheritence then that is a different story. We would like to keep the money to start setting up a Savings (Emergency Fund) so we have this money for the future so we don't end up where we are now. Or do we put in the kids 529 account and use for college? I am perfectly fine with the latter but I think we would like to save to use for emergencies but if we go that route I want to be 100% sure we are following all the rules and are not breaking any laws.

We live in GA if that makes a difference. Thanks in advance.

[tobee43]

gifts are different than an inheritance. after you filed and your 341 if you in-laws want to help you get a new start, why even tell anyone??? (i'll pretend i don't know a thing). you didn't cheat anyone, it's not like you were hiding it when you filed.

i know we took out a loan to buy our house after our bk, i don't think anyone cares at the courthouse...since after all, what's a bk about. A NEW START!!

i may be wrong morally, in some people's eye's, however, i see nothing wrong with excepting the gift to help with your fresh start on life!

best of luck to you! and, as i say, many will disagree with me, but you do what you feel is right for YOU.

[LadyInTheRed]

I hate to contradict an attoney's advice. So, I'll just suggest you read the law related to that 180 day rule your attorney mentioned and decide for yourself whether you need to discuss the gifts with him any further. The property that is included in the bankruptcy estate is listed in 11 USC 541(a).

Read the whole thing, including the following referring to assets recieved within 180 days of filing:

(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held: ...[snip]...

(5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date—
(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit plan.

Hint: "bequest" and "devise" are both synonyms for "inheritance". Somebody has to die for you to receive a bequest or devise.

[despritfreya]

You are in a Chapter 7. The gift is yours to keep. Your Trustee has no interest in the gift as the $$ simply is not an asset of the estate. Had you received the gift before filing that would be a much different story.

Ask your attorney to point out where in the Code an after-acquired gift (not an inheritance) becomes "property of the estate" in a Chapter 7. As Lady correctly points out, such a gift is not referenced in 541(a)(5).

Use the money in good health and as a wonderful start for the new year.

Des.

[SWConsultant]

Definitely check with your attorney but I believe it is yours to keep. I wouldn't go put a down payment on a ferrari but using it for reasonable expenses or creating a savings netwrok is both reasonable a moral. You filed the BK, you've been through your discharge... I think you are fine - no one died, keep the money