Worried now, will this be a problem?

[cwillie]

We filed bankrputcy the end of June. My daughter, who is a signer on our account put $30,000 into our checking account in May to pay on two of her student loans, which I promptly paid to Sallie May and AES. This shows up on our bank statement, which was not provided to our attorney due to the timing. Attorney is requesting that final bank statement prior to our 341 meeting. I never gave it any thought until reading some other posts about large deposits. Is this going to cause us any grief? If I was trying to hide something, I would have just logged onto her account and transferred it straight from hers, but really didn't think twice about it as anytime I have paid something for her from our money, she has always paid us back by transferring the money straight into our account. Is this going to cause a problem? I have to provide everything to our attorney by July 10th.

[AngelinaCat]

You need to talk to your attorney ASAP. The mere fact that it was even in your name for the merest nano-second is going to be a problem. In that the money went to pay student loans which are NOT dischargeable, may be your savior.

Good luck to you!

[rrockinggramma]

I am sure that your daughter has documentation that this money was in her account and then transferred to yours. Get her documents also so you can prove that this was HER money that was being used to pay off HER student loan. It wasn't "yours."

[AngelinaCatHub]

Cwille: You got problems right here in River City…… Yes, we did it too. We did not plan a Chapter 7 bk, and our lawyer said we could keep all our stuff and do what we wanted with it. So I sold a document and paid my goddaughter 4500 back that she loaned us in bad times. Then when spouse lost her job, we had to go 7. To make long story short, we have to pay the Trustee the amount we paid her back so we get penalized twice for the debt of one. They are working with us so, I can’t complain but if the document was not recorded late this would not have happened and is called “preferential payment to an ‘Insider’”. Since most of my debt in IRS, it will go there anyway. We could have been dismissed and have to start all over. You need to amend your paperwork and explain that it was only there as a way to pay the student loan. It will bring up questions. ‘Hub

[cwillie]

I can do a print-out of her checking account showing that the money is/was in her account - I am not a signer on that account. Her grandfather gave her $50,000 to pay off some student loans and to pay for another year of schooling. He did not give it to me. Do you think that will suffice, without having to contact my attorney, whom I have extreme trouble getting replies from by the way.

[AngelinaCatHub]

Cwillie, we may have the same attorney. I had all the paper trail of my transfer, but none the less it was called an "insider" transfer. Now if it went to a school loan for sure and the paper agrees, you may be able to skate by at your 341 meeting by volunteering to your Trustee first, and not let him find it later, and explain your understanding that that was a non dischargable debt and your daughter paid it through you, as it was in your name. 'Hub

[fltoo]

Let us know what the attorney says. This will be interesting.

Another innocent fraudulent/preferential transfer. Mine was, too, and I had to wait two years.

This nonsense is the other end of the spectrum where the new BK code was trying to stop people from transferring assets.

No one can give you advice on this, you NEED to speak to your attorney!!!

[cwillie]

I don't know that we could wait two years for this to "fall off." It's been about eight months since we've paid on our credit cards as it is. Both DH and I work and certainly don't need our wages garnished for a few months prior to filing! Now I'm a nervous wreck. I would not have paid the student loans this way had I found this forum first! I would have just accessed her bank account and paid it straight from hers. The only reason I did in the first place is because she is off at school and I have all the paperwork at home. I'm scared and almost in tears!

[AngelinaCatHub]

I don't know that we could wait two years for this to "fall off." It's been about eight months since we've paid on our credit cards as it is. Both DH and I work and certainly don't need our wages garnished for a few months prior to filing! Now I'm a nervous wreck. I would not have paid the student loans this way had I found this forum first! I would have just accessed her bank account and paid it straight from hers. The only reason I did in the first place is because she is off at school and I have all the paperwork at home. I'm scared and almost in tears!

Cwillie, right there you just gave an honest and believable explanation. Remember the concept of the bk is to wash clean the previous sins and give a person a "new start". That in so many words is in law. Look it up on google. Don't be dismayed. You will be dealing with people, and don't think these people don't see the writing on the walls as to what is coming. They will push you through I am sure as there will be many more coming in this economy we currently have. I think you will be fine. Hang in there. 'Hub

[rrockinggramma]

in my humble opinion, this was not an insider transfer, so to speak. Her daughter gave her money to pay off her student loans. Yes she deposited it and then immediately paid off the student loan, but it wasn't money she owed to her daughter and it wasn't money she owed on the student loan herself. She was the go between. Now it could be that the trustee will raise an eyebrow with this, I have no idea what her trustee will do. But I believe that as long as she can document that this was her daugher's money, in her daughter's account, transferred to her mother to take care of her daughter's student loan and she discloses it to the attorney and the trustee, that she will be ok. The OP didn't "owe" this money.

[danaf]

Yeah - my trustee asked for my bank statement after I filed too which surprised me. Very tricky - as most people consider their bk estate to be everything in your account up to and including the day you file. That was my understanding at least. Apparently not.

Anyway - try to not freak out. You have a perfectly legitimate explanation. Just gather all the documentation to back everything up, write a short note of explanation and give it all to your attorney (who will give it to the trustee). I'm sure it will work out ok for you.

[cwillie]

Thanks guys! I'm going to do a print-out of her account showing the transfer, and also our statement (of course) showing the payments to Sallie Mae and AES as I used my debit card. I can also do a print-out of the actual Sallie Mae account and AES account showing they received the payment, just to cover myself. I'll fax all of this off to my attorney with an explanation and hopefully it will satisfy her and the trustee. Again, I wish I would have found this forum first so I could have avoided this headache! My daughter was just asking me the other day if she should get a credit card to which I responded with a resounding NOOOOOOOOOOO! Told her to use her debit card for anything she needs and money orders or cashier's checks if debit isn't accepted! Reminded her of the mess we are in! I believe I am a co-signer on her AES account though and I did not list them as a creditor (didn't think I had to as I plan on helping her pay back any remaining student loans if we have any money left after all this) - will this create yet another problem?

[lrprn]

I believe I am a co-signer on her AES account though and I did not list them as a creditor (didn't think I had to as I plan on helping her pay back any remaining student loans if we have any money left after all this) - will this create yet another problem?

First go find out if you are indeed a co-signer on your daughter's AES student loans. If you are, then tell your attorney asap so he can add this to your creditor's list. (It could cost you between $29 (the court filing fee) and several hundred dollars to do this depending on how your particular lawyer handles adding forgotten creditors to your creditor matrix.

And before the dust settles, are there any other debts you've forgotten to tell your lawyer about? If there are, tell him/her about them immediately and have them added as well all at the same time.

[cwillie]

No, there are no other debts that I've forgotten about. I just really didn't think of student loans only because I'm a co-signer. Total neglect on my part I guess. I'll fax all of this to my attorney tomorrow when I send the batch of info she requested, along with an explanation letter, and hope I'm not in trouble.

[cwillie]

So I faxed everything off to our attorney two days ago, explaining everything that was done and why it was done that way, and of course haven't heard anything. I'm a nervous wreck! I'm trying to be hopeful and thinking the reason she hasn't responded is because there is no problem. However, I think it's because they are just super busy with bankos at this time. In the meantime, keeping my fingers crossed.