341 Meeting Trustee Requested Copies of Checks????

[questions]

I was wondering if someone could provide me with some hepful advice. Here is the situation. I attended my 341 meeting and everything want smooth besides the trustee asking for copies of checks that were listed on the bank statements. Everything about the meeting was routine and the trustee said to just provide copies of the checks. Well I have no problem with getting copies of the checks but the checks were written in my name. Money was withdrawn from my checking account for home repairs needed due to damage caused by bad weather. The total for the repairs was a total of $5000. My only concerns are the checks being written in my name and the money being withdrawn on 4 separate occassions. The individual who did the work was a friend and wanted to be paid cash so that is why the checks were written in my name. The friend is concerned that if I provide the trustee with the contractors agreement and receipts of payments it will force him to file the $5000 on his taxes. Will the trustee notify the irs if this situation? What advice can you also provide me about my situation about writing a number of separate checks in my own name to withdraw money to pay someone for home repairs. Should I be concerned about anything? Please let me know what your thoughts are. All would be appreciated. I just want to be done with this and don't want any hang ups. My lawyer said everything should be fine but I want to make sure I am doing the right thing. i would not want my friend to get red flagged for doing the repairs. Please help! Thanks again!

[wantout]

Best thing to do is be honest with the TT.

Provide him the copy of the checks and a copy of the repair contract.

This is not about your friend trying to avoid paying income taxes, this is about you in a sworn hearing in court.

Thats what I would do, what does your attorney say?

[bobbyquefour]

I completely agree with Wantout. You do NOT want to keep information from your TT and you WILL be under oath in your 341. I understand your friend's fears, but this is getting to be a larger scope for you (not asking you to throw your friend under the bus). But you MUST be honest with the TT. Otherwise, everything you do will be under scrutiny.

[justbroke]

This is not about your friend trying to avoid paying income taxes, this is about you in a sworn hearing in court.

Excellent advice right there! The Trustee is certainly interested in where $5,000 went. Don't get the Trustee upset. Remember, it is your friend who made the decision not to report.

[bobbyquefour]

Excellent advice right there! The Trustee is certainly interested in where $5,000 went. Don't get the Trustee upset. Remember, it is your friend who made the decision not to report.

Absolutely!!!!!!!!!!!! I'd rather have a pissed friend than a pissed trustee. This is your life in the balance here.

[questions]

Thanks for all the replies. Do you all think the trustee will be ok with how the checks were used? What do you think will happen once I provide copies of the checks and the reason for the spending? Also, what do I say if the trustee then asks why I didn't just write checks in the contractors name? All I can say is the really reason and that because that was what was requested and agreed upon. What can you see the trustee saying???????

[justbroke]

Thanks for all the replies. Do you all think the trustee will be ok with how the checks were used? What do you think will happen once I provide copies of the checks and the reason for the spending? Also, what do I say if the trustee then asks why I didn't just write checks in the contractors name? All I can say is the really reason and that because that was what was requested and agreed upon. What can you see the trustee saying???????

Because you used the money for home repair, and can prove it with receipts, I see no issue for you at all. Sure, the Trustee may ask why you didn't write a check, but... you can just say that contractor wanted cash. So long as you have receipts which back up your statements, it shouldn't go anywhere.

[Mi Bankruptcy]

Remember, your friend can still make amends on his taxes when they file next year. So.. this is a non issue. If your friend decides not to document it on their taxes then that is on him. He is not in court right now but you are.

[questions]

[QUOTE=justbroke;400810]Because you used the money for home repair, and can prove it with receipts, I see no issue for you at all. Sure, the Trustee may ask why you didn't write a check, but... you can just say that contractor wanted cash. So long as you have receipts which back up your statements, it shouldn't go anywhere.[/QUOTE



What happens if the trustee asks to see material receipts and the contractor cannot provide any because he threw them away already?

[justbroke]

What happens if the trustee asks to see material receipts and the contractor cannot provide any because he threw them away already?

You're getting into too many what-ifs. That would be between the Contractor and the Trustee anyhow. The absolute worse case is that the Trustee thinks it's a preferential payment and goes after the Contractor. The contractor only need prove that it's a contemporaneous exchange for services -- as that's not a preference. Plus it was for repairs of your home, which I'm sure you can show were made by taking some pictures? However, the burden is still (probably) on the contractor, not you.

I think you're getting way to far ahead of this.

[questions]

You're getting into too many what-ifs. That would be between the Contractor and the Trustee anyhow. The absolute worse case is that the Trustee thinks it's a preferential payment and goes after the Contractor. The contractor only need prove that it's a contemporaneous exchange for services -- as that's not a preference. Plus it was for repairs of your home, which I'm sure you can show were made by taking some pictures? However, the burden is still (probably) on the contractor, not you.

I think you're getting way to far ahead of this.

Thanks for taking the time to provide me with your opinion. I just want to make sure everything is covered and done correctly. I think of every case scenario because I just like to be prepared for everything and when I contacted the contractor about the situation he was concerned about the cash payment and not having receipts. So you think everything will be fine then? I have an agreement with the contractor and myself that states everything and then I have receipts for the cash payments. I just wonder if the trustee is going to want more information and look into this further or what I am hoping is this satisfies the trustees request. Do you think I will have to meet with the trustee again? Also, what are your thoughts about my chapter 7 being discharged? Thanks again for all your help. I am just so stressed right now just looking for info so I can relax.

[justbroke]

I don't think you'll have a face to face with the Trustee. I think that you have sufficient documentation. As to whether the Trustee agrees with my assessment, that's a different story. Remember, the Trustee is motivated by looking for money. They make only $60 on a no-asset case, and really don't want to be spending "money" chasing nothing. You may find that the documentation which you provide to the Trustee is sufficient to make the Trustee go away!

[Mi Bankruptcy]

Take pictures, show the agreement and any receipts. If the trustee sees you as being forthcoming there shouldn't be any problems. Worse case scenario the trustee wants to talk to the contractor. You paid for the services by cashing the check.. big deal.. You wanted to make sure the contractor had cash and you didn't bounce any checks for NSF while the contractor waited on cashing it until the work was done.

[questions]

I don't think you'll have a face to face with the Trustee. I think that you have sufficient documentation. As to whether the Trustee agrees with my assessment, that's a different story. Remember, the Trustee is motivated by looking for money. They make only $60 on a no-asset case, and really don't want to be spending "money" chasing nothing. You may find that the documentation which you provide to the Trustee is sufficient to make the Trustee go away!

Thanks again for your time and help. What is the process after I provide the trustee with the requested check copies? What is the process after a 341 meeting?

[justbroke]

Thanks again for your time and help. What is the process after I provide the trustee with the requested check copies? What is the process after a 341 meeting?

There really isn't a specific process. What you'd be waiting for, though, is either the declaration of an asset case or a no asset declaration. This usually happens shortly after the 341 Meeting, unless followup is necessary.