I Sure Am Glad I Found This Site! (long)

[danaf]

[HenriettaHen]

[wrinkleigh]

10 acres of land I would worry about.

A website -- I wouldnt lose a bit of sleep over. Trustee cant turn a quick profit off of it -- so he probably wont even bat an eye.

[DeadManCrawling]

I think you are on a dangerous path here, as you describe your plan.

I agree with other posts that the trustee probably won't care. Many people have sites. I would caution you to examine the contents beforehand. If it LOOKS like a million bucks or like it's GENERATING a million bucks he will be interested.

I would disclose the pertinent facts without adding anything more than the basics. "I own a website that I tried to launch a business on. It makes no income now, and I don't foresee that changing."

If you "liquidate" the site or "sell" it to another party, and close a checking account, and dissolve an llc with the same or similar names, there may APPEAR to be fraud going on. Now, if your story is exactly as portrayed there IS no fraud, but the trustee may be inclined to look into the matter-which would ultimately be cleared up-but it could take a long time and result in additional attorney fees.

It's easy enough to plug names into a search engine and discover that you did own the site at some point. I have heard of trustees (in posts on this site) immediately running web searches on new cases as they come across their desks. One person here, can't recall who, had a site that was an EXAMPLE of sites he could build. He included pages of old computer junk at random inflated prices. Not witht he hope of selling the gear, but rather to show what a potential CLIENT site may look like, if he were hired to build them a site. It slowed his case considerably and caused a lot of problems.

Also, if you dissolve the llc and don't declare you owned it (the forms ask for any stocks in privately held companies for 6 years), then you ARE committing fraud by not disclosing. It may be that nothing would happen to you. Or it may be that they dismiss your case for "bad intent".

DMC

[danaf]

Wow, thanks for the replies. I really appreciate it.

Honestly always is the best policy, I know. But I just put so much blood, sweat, and tears into this site that I would be freaking if I lost it. It DOES like like a million bucks BUT it isn't generating any income because currently it is free to all members. I will think seriously about the input I received here though.

I looked back and it isn't a chase card....it's a citibank. But I doubt there's much difference between the two. I need to wait, it's as simple as that.

I don't understand this preferential stuff though. I received a large tax refund this year. I could put alot of it towards one of my student loans. Is this what is considered preferential? Would doing this be negative?

Dana

[CindyLou]

basically with preferrential payments the law is saying its not fair to pay one creditor and not another. If you pay one creditor a large amount then file BK, the trustee will require that creditor to pay the money back to the trustee to equal and fair distribution to the creditors. Even if the person you paid back is family they will still often times go after that money.

[danaf]

Is there a time period that they look at this preferential treatment?

If I were to pay alot now towards one of my school loans and I still file in 3-4 months - is that scrutinized? Is that negative?

I also don't see how they could retrieve payment back from a gov't subsidized student loan?

[lrprn]

Is there a time period that they look at this preferential treatment?

Generally speaking, payments of $600.00 or more to an unsecured creditor made within 90 days of a bankruptcy filing is a preferential payment. Also, repayment of debt to a family member within 12 months of a bankruptcy is a preferential payment.

If I were to pay alot now towards one of my school loans and I still file in 3-4 months - is that scrutinized? Is that negative?

A non-secured creditor is a non-secured creditor to the trustee. Here's a good explanation of preferential payments and how they are judged by the courts - http://www.moranlaw.net/preferences.htm

I also don't see how they could retrieve payment back from a gov't subsidized student loan?

If the trustee thinks a payment meets the criteria for a preferential payments, he/she can get money back from any non-secured creditor. Student loans, even government loans, are considered non-secured in bankruptcy. You need experienced legal advice from a bk lawyer in your area who knows what the district typically calls preferential and what is acceptable. This can vary widely between trustees and bk districts around the country. What does the lawyer you are working with say?

[danaf]

I just went for a consulation and after finding out about the consolidation thing from this board, which he did not even tell me about....I think I will be finding another lawyer when the time comes. I didn't pay him anything. I could always call him and ask but whether I get an honest response or not is questionable.

Sounds to me like paying towards my student loan 3-4 months out shouldn't hurt me. I'm almost afraid to consult another attorney at this point because this is a small town.

Otherwise, I have this extra money which I honestly was planning on putting down on one of my cc's in the hopes of getting out of this financial mess. But also, I was living for free, now I'm not. Now I am paying rent & other expenses. So I was hopeful but with all of these added living expenses I looked into the future and getting out of this looks grim. Which is why I decided to file.

Now I have around 10k and don't know what I should do with it. Sorta nuts.I suppose I could go out and buy furniture. Currently I don't even have a sofa or even a dining room table. But to me, that looks worse than trying to pay towards my student loans.

[DeadManCrawling]

Now I have around 10k and don't know what I should do with it. Sorta nuts.I suppose I could go out and buy furniture. Currently I don't even have a sofa or even a dining room table. But to me, that looks worse than trying to pay towards my student loans.

We have about 30k to "spend" in the next 60 days or so. It is in "before-tax" dollars. After taxes, if we tried to actually pay creditors, it would amount to around 12-14k on what is now 80k in debt, all on credit cards, all ticking at 33% interest.

It wouldn't even make a dent at that interest rate.

Some things ARE necessary. A couch and some furniture would qualify I imagine. Now, I wouldn't hop the big ole jetliner and rush to Paris for the latest nouveaux chic riche luxury set, but something in a reasonable price range shouldn't be scrutinized much if at all.

Also, most people, us included, have long neglected some other REAL necessities, things like dental care and medical.

I posted on our situation, then withdrew it, thinking everyone would just call me an idiot without thinking. I was wrong. Every situation is different, and almost everyone here has been nothing but positive and helpful, very supportive.

Also, even though we will appear to be spending an extravagant amount, our attorney says that the expenses we laid out will be looked at favorably:

Eyeglasses, dental, new A/C unit, so forth. Hope he's right.

Still wish he had let us put HIS bill on a Chase card.

Here's the link on how to spend 30k in 30 days.

http://www.bankruptcyforum.com/showthread.php?t=13836&highlight=30k

Good luck and welcome!

-DMC

[danaf]

yep - everyone's situation is different. If the law hadn't changed last year, I probably wouldn't be so diligent about dotting my i's and crossing my t's.

I read that code this morning on preferential treatment.

It says:
' Note that payments to a fully secured creditor aren't preferences because the creditor didn't get more than he would have in bankruptcy, where the creditor would get the value of the collateral.'

My student loans are considered secured so I think I'm ok putting a chunk towards it. Especially now since I'm more than 90 days away from filing. I need to put as much time as I can between Feb and filing because of the consolidation.

[CindyLou]

Student loan are NOT secured. They are priority unsecured. Therefore, you may have other priority creditors (i.e., IRS, State Dept of Revenue, etc) Also, this may conflict with any secured creditors who get their money before priority unsecured. Depending on the trustee, he could determine that you could put your student loans in deferment until after your BK and not let you pay that money toward that. I would not pay that money until you see an attorney.

[DeadManCrawling]

Cindy is correct. Everything changes in BK and though the student loans MIGHT have been secured(or seemed so) at one point, their priority will change in BK to priority unsecured, placing them ahead of credit card companies, but behind IRS (of course) and so forth.

DMC