Cash Gift

[megadebt]

As I was pulling together various bank statements, etc., I realized that back on Dec 31, I received a cash Xmas gift from my Grandmother (proceeds from selling her house) for $5000. When doing the means test, is this considered income?

Thanks

[gymbofreak]

yes i believe it is, anything over 200 i think..not sure though..sorry

[megadebt]

Thanks gym...can anyone else confirm this?

[getouttadebt]

I am not a lawyer, so I can only offer you my opinion. While the $5k gift was not earned income through your payroll, it is considered income. If your Grandmother had given you cash and you never deposited the money in your bank account, it would have been almost impossible to track. Technically, it would need to be reported on Line 10 of Form 22A, Income from all other sources.

The problem I have with this is that had you studied the BK law for Chapter 7 more closely before filing, then you could have avoided this penalty by delaying your filing date until 6 months had passed since that gift. In my opinion, this action would have been manipulation of the system, but it would have been allowable. I would suggest you consult with an attorney regarding this question.

Logically speaking, this was a one time, non-recurring event that is not indicative of future income and, thus, if included, it will inflate your 6-month average income. Funny thing is for me, my local Chapter 7 Trustee and the US Trustee never asked for my bank statements so they would have never caught a $5k gift, and I could have skated through on that basis.

Good luck to you.

getouttadebt

[megadebt]

I actually haven't filed yet. Originally I thought I was a definite 13 but after talking to a lawyer a 7 should be doable (forgot to mention to my lawyer about the gift). The gift was received in Dec so if I have to wait until July to file then no biggie

Thanks for confirming this for me though. I plan on talking to my lawyer next week

[CindyLou]

You might have to wait to file. It would probably be considered similar to a bonus and would be added in.

You have a very sweet grandmother!

[CATCHMEIFYOUCAN]

Hmmm, interesting, I'm wondering if that goes for gambling winnings - I don't recall adding gambling winnings to my income when I filed. I know that they knew about it but gambling wins never became an issue.

Catchmeifyoucan

[megadebt]

Only in BK world would a $5000 gift actually hurt you

So is it also included when doing schedules I & J, or are the schedules based on projected income where as the means test is current income?