Another Serious Question

[CityGirl]

I won $50,000 last year at a casino but paid my parents with most of it and paid off some credit cards which led to being the same amount in debt right after ( please don't make me feel bad, as I already know the error of my ways )

When I submit my tax return from last year, it will show my income as $50,000 higher but I wrote off that money as loss at the same casino last year. I have the paper to prove it from the casino.....
Will that hurt me with payments or do they base those on your last 6 months and not last year?

[SinkingFast]

The Trustee will probably notice the inconsistency in your Income Taxes from one year to the next. Most likely you'll get asked about it. That's what happened with us.

When Hubby got laid off, he got paid severance, which was heavily taxed. That lead to a big refund. The next year, we cashed out our Retirement IRA to pay bills. That caused us to have to pay a substantial amount.

The Trustee noticed the difference in tax years and asked about it. Why we had such a big refund one year and paid so much the next year. All we had to do was explain it. And our attny had already supplied all the supporting documentation.

Due to the Yo-Yo effect of the previous 2 years, our Trustee required to see our filed income taxes for a "normal year". So don't be surprised if your Trustee wants to see your taxes when you do file in the future.

[SinkingFast]

I won $50,000 last year at a casino but paid my parents with most of it and paid off some credit cards which led to being the same amount in debt right after ( please don't make me feel bad, as I already know the error of my ways )

I just noticed the part about paying your parents money.

When did you pay them and how much was it??

Any payments to Insiders (family, friends, close personal business associates) made within a year prior to filing BK must be disclosed.

Payments to Insiders are considered Preferential Payments. The Trustee could go back to your parents and make them turn over what ever you paid them "for the benefit of your Creditors".

[CindyLou]

you would be better off showing you lost it right back at the casino vs. paying your parents. didn't you say you lost the same amount at the casino after that in the same year?

[CityGirl]

yes, I lost it...and I have the paperwork to prove it.
I paid my parents amex off of which I was a authorized user. It was $17,000. I was making payments to them but then I paid them off.

[CindyLou]

at least it was paid directly to the creditor and not to your parents. how many months ago was the payment made?