Asset pre-planning.... HELP

[salsa]

I have met with 5 different attorneys, and have received conflicting advice. The situation is I have an animal that I need to sell as I know I can't cover it through exemptions and can't afford to support it each month. I was going to get an appraisal, to see the value and try and sell it. The outside hope is that I could sell and potentially settle. If I can't get enough, what other options do I have with what to do with the money?

A couple ideas I had:
- downpayment for 1 vehicle as we need newer ones if we do a 13.
- House needs siding, roof needs replacing, garage doors need replacing, tub/tile area is rotted.
- Prepay what I could, maybe 6 months of auto insurance/life insurance.
- stock up a little on food/cleaning supplies, within reason.

If I keep track with receipts and say end up filing a few months later. Will that be an issue?

[mountanddo]

When I first read it I thought you really meant an animal but then after reading further I decided no. LOL

[salsa]

Yes, it is an animal.....

[mountanddo]

Oh ok, it must be a horse or something like that. I was thinking that a dog couldn't be that much money, could it?

[salsa]

Yes, a show horse.

[LadyInTheRed]

Salsa, I think all of your ideas for spending the money are good legitimate ones. I would give priority to the first two. Also, don't forget you'll need to pay your attorney fees (at least a retainer even if the rest is included in your plan) and court filing fees.

What is the conflict advice you've recieved?

[salsa]

The conflicting advice... A fraudulent conveyance problem under 11 USC 548. A couple said I could spend down as indicated in the first 2 points above, some said wait 9 months before filing after spending, the other gave no timeline. One attorney said I could take the money and pay on the house, and another said I could put in an ERISA account.

It just amazes me the different advice and it's extremely frustrating. I think I have had consults with 5 attorneys and am scheduling another one. Uugghh...

[despritfreya]

The reality. . .

1. The horse is not worth what you think it is - even if it is a European Warmblood, unless it is at FEI level with no maintenance issues. . . then I could see upper 5 or lower 6 figures - if you find the right buyer.

2. You can sell any asset prior to filing as long as the transaction is "arms length" and for adequate consideration. This eliminates any "fraudulent conveyance" issues.

3. You can live off the proceeds of the sale, fix your home (DO NOT MAKE A PRINCIPAL REDUCTION TO THE MORTGAGE), purchase necessary exempt assets etc. You must keep detailed records of how you spend the money. The money cannot be used to pay "insiders" and should not be squandered.

4. If the horse is actually worth a lot, you can use the money to settle, one on one with creditors and maybe avoid a bk.

Edt: As to putting the funds into a retirement account: You do not list your State. If you are in AZ I can tell you that, under State law, you would have to wait 121 days before filing a bk if you contribute to the retirement account. Regardless of state exemptions you also have to be cognizant as to how much you can contribute based upon ERISA/IRA contribution laws for 2011 and 2012 (since we are close to the 1st of the year).

Des.

[salsa]

1. I am going to get an equine appraisal. So I know what to.price at and document value.

2. I am in wisconsin

3. What do you mean using for other exempt assets? Like down payment on car?

[despritfreya]

What do you mean using for other exempt assets? Like down payment on car?

Yes. There is even an attny in my district that hands out our State's exemption list as a guide to what can be purchased and at what price.

Des.