Included in Income or Gift?

[B12]

A couple days ago, someone had posted about a parent or relative paying a bill for them and I cannot find it. Anyway....

If someone pays a bill for you, rent, electric, etc., is that included on the means test as income?

Someone had suggested that the relative pay the bill directly. Is that a gift or included as income?

Very confused about this.

[magyar123]

Don't think that occasional (2-4 times a year) payments for utilities, and maybe one or two times your rent by others would be considered a "gift" as far as the means test is concerned.

[Bandit]

Interesting.
I also read somewhere when you buy something on credit & give the item as a gift, it is deducted from what you owe & included as income. Is that true?

Someone had suggested that the relative pay the bill directly. Is that a gift or included as income?

I also wonder how this works if it is the other way around. For example the BK client is paying a utility in someone elses name. Is that an expense or does it just go into a black hole as nothing?

[lrprn]

Whoa.....there's some overthinking going on here. Let's take things one at a time.

If your parents, another family member, a friend, a colleague, a stranger on the street....anybody....gives you CASH during the six months before you file, then that is supposed to count towards your income. However, unless the cash gift is substantial (over $1K at least), it's probably not worth stressing over. Your attorney can give you his/her advice about this.

If you, the bk filer, give someone else a GIFT IN CASH that is less than $600 total during the 90 days before you file, this is not income because you no longer have it.

If you, the bk filer, give someone else a GIFT IN CASH that is over $600 total during the 90 days before you file, your trustee can choose to go after that cash as a preferential payment if he/she thinks it's worth the time and resources.

If you buy someone else something as a gift on a credit card, this is NOT counted as income for you and is NOT deducted from what you owe on the credit card.

The key here for filers is to be given a GIFT and make sure that the GIFT IS NOT CASH and is NOT deposited into your bank account for you to spend!

A family member or friend can pay a bill for you as a gift - that's no problem at all. It's when the 'gift' is actually a loan or the cash is placed into your account for YOU to spend that your bankruptcy gets involved.

Hope this clarifies things. It's confusing for sure!

[ameliabedilia]

Our in laws have been paying our car payment for the past 6 months. Originally they sent us money each month, but now they are just paying it themselves.

I mentioned it to all the attorneys I interviewed, and they basically told me that to be honest, you need to add it to your means test on line 8 as well as to your calculation of monthly income on schedule i.

If it is not a regular payment, it usually doesn't need to be mentioned, as it is a gift. They all said that many people do not include it and it does not cause problems, but technically if it's on a regular basis, then you should include it.

We did end up including the money each month even though they are now paying it directly because it was in our best interest to-

We are in the negative each much by a ton, and we want to keep this car (it's a lease for another year). In order to keep those types of things, the judge/trustee likes you to be breaking even so you can afford it and it won't cause undue financial hardship.

[Optimistic09]

Whoa.....there's some overthinking going on here. Let's take things one at a time.
If you buy someone else something as a gift on a credit card, this is NOT counted as income for you and is NOT deducted from what you owe on the credit card.

If the bk filer pays for a service on a credit card for a family member is that considered a gift? Does this disqualify you from filing Chapter 7?

This is not a question to try to get by with something but more how to remedy it if it has already happened.

[Chowder]

Oh great! My folks gave me the $80k to pay off my second last year. Now I have that to worry about to.....

[Beeheery]

LRPRN,
Do you happen to know if someone paying for my schooling is considered income or a gift? Does it matter if they give me cash and then I pay for my schooling in cash and keep the receipt? Is it better if they pay it in person? The reason I ask is because someone is paying for my tuition this year but they no longer accept Visa and he was going to send me cash and I was going to go to school directly and pay it. Now i don't know what to do!