Chapter 13 Filing Question

[letterkenny]

I filed Chapter 13 yesterday. One issue came up. I gifted 17k a year and a half ago to my best friend to help him buy a home that I also live in to this day. I pay cheap rent and no utilities. My attorney said the trustee could try to get the 17k back because it was in the last 2 years but he doesn’t think in a chapter 13 that it will be an issue. Now I’m scared.

[justbroke]

Don't be scared.

The worse is that they have to go after the car itself by undoing the transfer. The thing is that most Chapter 13 Trustee's don't want to deal transfers and other things. In this respect, a Chapter 13 is much different than a Chapter 7.

Since you lived there and continue to live there, you could probably argue that's why you had reduced rent with no utilities over the last 1.5 years. I think the worse case, and this is the absolute worse case, is that you have to pay that amount into the Chapter 13 as a minimum. In other words, you'd have to show that you'll pay at least $17K to the unsecured creditors over the life of your plan. In a 60 month plan, that would be about $285/month.

The Chapter 13 Trustee may not even care when you mention that. you did that to live in the home and you are currently living in the home. Thoroughly discuss this with your attorney.

But, like your attorney, I have not seen Chapter 13 Trustees get involved in fraudulent transfer clawbacks unless they are significant and easily to deal with. If it were a Chapter 7, all bets are off.