What is the exact definition of "insolvency"

[DeadManCrawling]

This guy (swampwiz) is far from a wiz. Sorry my friend, I must call em as I see em.

So many of your posts seem designed to game the system and KEEP up the lifestyle and decisions that brought you to this forum in the first place.

I truly wish you well, but you have GOT to reconsider some of your short-term gains against the long-term benefits of following the letter of the law.

You stand to lose a lot. Including a bit of time in jail, if some of these pipe-dreams are exposed in court.

[shabam]

You have three people to worry about:

1. Trustee
2. UST
3. Creditor

If any of the above three notices any red flags in your petition or history, they are going to investigate you further. Neither of them cares about opinions or excuses. Unlike criminal court, in BK it's not a case of innocent until proven guilty.

If you want to conduct research on various cases, you need to get a pacer account and start looking at some cases and their outcomes. Could have, should have, would have or going to means jack in BK. Once you read a few AP's and various UST objections, you will get the drift on what will fly and what will not.

[swampwiz]

Why would cash advances to be in a stable mutual fund be bad? At the very bottom, the chances of losing more were very low, and in fact I made money from those cash advances. (Actually those cash advances would be thought of as simply transferring from one account to another to get a lower interest rate.)

Anyway, I was wondering if insolvency can be thought of as having the ability to pay any debt that does not have other assets on the side. For example if I have $120K in debt, but $70K in assets, my level of insolvency at that time would only be the ability to pay debt on $50K, or about $900/mo. I think anyone can reasonably say that he could get a job paying $900/mo more than living wages. (Actually I had thought I could get a job earning $40/hr, but I couldn't get it.)

[swampwiz]

You have awhile before you can file without triggering AP's from your bank and credit card companies.

What does "AP" stand for?

I will wait as long as I have to. The last cash advance (however defined) was in September. The clock starts ticking then. I made a large payment (well, at least larger than the threshold of $600 or whatever) in early October. Since this was a regular credit card and in no way any type of preferred creditor (and I intended to put money in precisely to use it again), it has no effect on my case - it only has applicability to the creditors fighting over my "scraps". And in any scraps would be big enough so that this creditor's portion would be over this payment amount.

[swampwiz]

You borrowed money that is not yours to invest. If you put that down as a reason to take out a loan, guess what - you would not get the loan. If you took money to invest and could not predict the outcome, you gambled with risking that money - same as if you pulled the slot handle. Your 401(k) money is money YOU earned and did not borrow... Hopefully you can see the difference. I just don't get that you cannot see some things and are either playing with heads on this forum or in need of help to sort things out, both legally and medically. If it is the later, you are stuck in a state of denial and have not yet hit the bottom to get off your feet and do what you need to do and will continue posting forever making excuses....some of us are trying to point that out to you as many of us have been in that place before...

No, the "loan" was just a credit card advance, which is money I can do with as I please. And I had had those accounts for a long time. I didn't just decide to apply for credit to put it into the stock market. Heck, I'm sure you have read the come-on from those convenience checks - "go on a vacation." If going on a vacation is not putting money down a rat-hole, financially speaking, I don't know what is. Investing in a vehicle that the POTUS himself said we should invest for our retirement is nowhere in the same league.

There is no denial. My mistake was on the same order as someone who maxes out his credit cards to start his business, with the business then failing. I had a friend who did it, and now his business is doing fine. Would there be something wrong with these folks?

[Flamingo]

I invested in a safe index fund, not speculating on individual stocks. I have all my 401K money sitting in such an index fund - would that be considered gambling?

You borrowed money that is not yours to invest. If you put that down as a reason to take out a loan, guess what - you would not get the loan. If you took money to invest and could not predict the outcome, you gambled with risking that money - same as if you pulled the slot handle. Your 401(k) money is money YOU earned and did not borrow... Hopefully you can see the difference. I just don't get that you cannot see some things and are either playing with heads on this forum or in need of help to sort things out, both legally and medically. If it is the later, you are stuck in a state of denial and have not yet hit the bottom to get off your feet and do what you need to do and will continue posting forever making excuses....some of us are trying to point that out to you as many of us have been in that place before...

[swampwiz]

I invested in a safe index fund, not speculating on individual stocks. I have all my 401K money sitting in such an index fund - would that be considered gambling?

[BKOnce]

No need to go see a doctor because he got both symtomps... dementia & ADS (Attention Deficit Disorder)..

[Amy26]

I think he/she certainly has cause for being paranoid. There are some definate shady things going on here! From all the posts and questions about keeping credit cards after bankruptcy etc... you need a very good attorney. This will not be a walk in the park and for you to say that you are financially responsible and always good with money.... I cannot see how that is a true statement.

I think Flamingo's advice about seeing the family doctor is a good idea. Being in a state of panic and stress is not good for judgement or your health.

Good luck.

[Flamingo]

You throw questions out, you ask for advice, but you are not listening. Go back and re-read the posts. How many times have you been told:

FIND A GOOD BK ATTORNEY!

If you're going to ask for advice, please listen to the answers.

Excellent advice the OP needs to take and the OP also needs to know that if the trustee smells anything wrong with any part of the situation that they can go back more than one year to check out financial dealings. OP get yourself a good attorney and quit trying to run from the situation. Also may I suggest if you are that paranoid about all this, see your family physician or get a recommendation to one and advise him/her you are having drastic financial issues; you are suffering from anxiety and medication/counseling/help can help you see things in a better perspective where you can sort things out properly... best of luck to you.

[Flamingo]

I won't have a problem with fraud from the grant. I did everything I could to try and get a house built, and the whole principle is there. Also, I should not have a problem with the $35K that I spent on replacement items that I expected the whole time to be covered with the eventual SBA loan.

Perhaps I will have a problem with taking a cash advance and basically investing it the market. I have had a long history of taking out such advances when I felt that the market was good, and I made money every time. I didn't this time (at least for those advances that I had from around 2005.)

How many folks going into a small business max out their credit card to start the business? If the business were to fail, wouldn't they all be guilty of insolvency fraud? The small businessman is supposed to be the lifeblood of the country - are they all scam artists? What about the vaunted investors? Aren't they supposed to be equally the backbone of the economy? What about all the day trading folks who got going during the Tech Bubble of the late 90's? There were countless BK's because folks got overextended with unsecured debt as the losses mount.

As for advances for living and paying finance charges, I was robbing Peter to pay Paul. How many countless folks have done that?

I didn't sock away any cash. I didn't set up a Swiss bank account. I was just trying to, as our current POTUS would say, "keep the dream alive". All I needed was the $40/hr job - something I was teased with every few months with an interview that I thought went well.

Now, for my minor "crime", how long at a Club Fed could I get? Me and how many other folks? Heck, it would be free room & board, I could continue to study my software development skills, and my 401K would continue to build.

Face it square on - you have a gambling problem with the stock market instead of walking into a casino. Gambling takes on many financial forms. Folks that max out credit cards to start businesses don't take the cash from the cards and invest it in the stock market. They purchase items for the business with the money and pay it back when the business does well. If the business goes under, their intent was to use it to start the business, not gamble on the stock market. You're getting the wake up call but have not yet jumped out of bed....

[Flamingo]

I took $63K in grant money, and had already spent $40K on the home (for the homesite, clearing the homesite, putting in a culvert, a small retainer for a construction advisor to give me an estimate for the total building costs, hiring an architect, etc.), and have $36K in cash (just sold to get out of the market today to lock in my $20K loss.) So I will put $23K of that into one of my checking accounts that is only to be used for homebuilding (and would be liquidated upon bankruptcy, if it were to come to that.) So I'm back into legal status. In fact, that last $23K earned me about $8K in profit, so there! (i.e., the net loss on the other portions of the investment took a real bath of $28K.)

On a side note, I would have a hard time believing that with all the shananigans that was going on in Wall Street, CDO's, mortgage brokers, etc., that saying that someone who thought that parking the money into the stock market (a standard index fund, not a wild volatile stock) was legal was actually committing a crime, when at the same time, the POTUS was saying that we should invest our Social Security funds in the stock market as well. Perhaps the person made a small error of judgement (that could very well have been spelled out in the 20 pages of legal documents.)

As for the grant itself, a bankruptcy that would require the sale of the property (which it would, obviously) would nullify any requirement to pay back the grant for not building the home. BTW, the total grant was $112K, of which $49K went to paying the remainder of the mortgage on the destroyed property, leaving a cash payment to me of the $63K. The penalty for not building the house would be the difference between 2 different options (plus interest), with the other option (i.e., someone who would not buy a home in the state) in my case being about $92K less (plus interest.) IOW, if I went bankrupt and lost my homesite, I would not have to repay the $92K. Obviously, I'm either going to build the house (in which case I would not have to repay the $92K), or go bankrupt, in which case I would also not have to repay the $92K.

See an attorney and go over the entire situation and get the legal advice you so desperately need. You can afford a free consutation with a BK attorney. The attorney is bound by attorney/client privelege, ethics and privacy laws and cannot divulge your situation to anyone.

[justbroke]

Your problems are all GWB's fault.

Huh? Someone must be running for office!

[OhioFiler]

*** I think you all don't understand. The grant was for $112K, $49K was paid directly to the bank (i.e., did not pass through me.) I got a check for $63K. I used it to pay off creditors, and then got the cash advances around, and put it into the stock market (my intention was not to pay off the credit card and just leave it there - it was to pay off the card since it was at the end of a 1 year 0% offer, and then get another 0% offer for a year.) Remember, by then I had already sunk $40K into the home, so the most that can be said is that I put $23K in the market. OK, so technically I was not supposed to do that. I don't think that rises to the level of fraud.

*** I am a stickler for details, and I am the type of person that reads everything I sign (except the stupid internet agreements), and did not see anything written that said that this money had to go into escrow - only that I buy a home. I had already bought the lot, and was planning to get the financing. There was no stipulation (at least told me orally) that I had to spend all the money - only that I get a habitable house. Any money left over would be mine to keep.

*** And anyway, like I said before, POTUS W had told me that it is good idea to put important savings like Social Security in the stock market since I would get a better return.

Your problems are all GWB's fault.

[swampwiz]

Yes I think by May you would be able to file, but you need a very good attorney. You have been playing a shell game with large sums of money and the trustee is going to want to look at which shell the money was under at which point in time. I also think due to the large sums of money in cash advances, stocks, home building grants, etc, you have a large chance of getting the US Trustee involved. As you plan your bankruptcy, you need to really watch your discretionary expenses and make sure you don't own any assets that could be sold to covert you to a chapter 13 (like your stocks). If you have a luxury car you need to trade down while your credit is still good.

Stop day trading now as well. The sooner your finances do not look like a shell game, the better.

*** I think you all don't understand. The grant was for $112K, $49K was paid directly to the bank (i.e., did not pass through me.) I got a check for $63K. I used it to pay off creditors, and then got the cash advances around, and put it into the stock market (my intention was not to pay off the credit card and just leave it there - it was to pay off the card since it was at the end of a 1 year 0% offer, and then get another 0% offer for a year.) Remember, by then I had already sunk $40K into the home, so the most that can be said is that I put $23K in the market. OK, so technically I was not supposed to do that. I don't think that rises to the level of fraud.

*** I am a stickler for details, and I am the type of person that reads everything I sign (except the stupid internet agreements), and did not see anything written that said that this money had to go into escrow - only that I buy a home. I had already bought the lot, and was planning to get the financing. There was no stipulation (at least told me orally) that I had to spend all the money - only that I get a habitable house. Any money left over would be mine to keep.

*** And anyway, like I said before, POTUS W had told me that it is good idea to put important savings like Social Security in the stock market since I would get a better return.