100K limit? myth or real

[Lajazz947]

By the way, I really sympathize with everyone on this board. I know I am in better shape than most and I don't fell sorry for myself.

My unsecured comes from a real estate fraud done to me by a former childhood friend for about $300,000 for which
I am in litigation now.

The money I borrowed for my home was due to come back to me from him to replace but never did and now I am out of money save my income.

Thanks to all of you.

[banca rotta]

The only red flags would be your income at the time of the credit purchases. A very low income and a very high debt may help their case that you borrowed money with no intention of paying. This holds true to credit cards & other loans. Not with student loans and medical debts.

[Lajazz947]

Nope, actually was making more at the time of the CC purchases, not less.

I lost lots of monthly income in 2007 (about $5000) and had a real hiccup in early 2008 but now back on track.

Thanks

[halloweendmb1]

Someone said they ask for years worth of bank statements, years worth of cc statements. How much of that is true?

[Lajazz947]

Years as in more than one?

Now THAT would be a hassle since I shred them at t he end of each year but I guess I could request them from the CC companies, how ironic would that be?

[Priceless ProSe]

Regarding the litigation, are you suing your "friend" for the 300k? If so wouldnt you want to see how that played out (maybe you would no longer need BK). If the case is that you are suing your old associate for a large amount of money the trustee may very well wait to see what happens with that case.

[Priceless ProSe]

Also the 40k payment to an associate would be a red flag as well, I would assume the trustee would go after this money if you filed within a certian timeframe.

Also, the 220k in unsecured, it was for home remodeling or it was a scam your friend got you involved in? This would be interesting to know what the money was borrowed for and what it was actually used for. Although some time has passed since you borrowed it, the sheer amount of money involved would make one think that it deserved inspection. Usually if you borrow money for home improvement and use it for other means it is looked down upon (possibly fraud), due to the fact that the home usually secures such a loan and there is no increase in the value of the home if you spend the money on something else.

In regards to low income and a high amount of debt, I believe it is the sole responsibility of the creditor to prove fraud in application, not the trustee. In general fraud is extremely difficult to prove (meaning fraud at the time of application).

Lastly, On one of your vehicles you stated it was paid but you owed money on it to an associate, could you elaborate on this? Did you bought it from a dealer/finance company (or payed outright) and then used it to secure a loan from an associate? The trustee will defenitely want this clarified, and your answer may affect what happens with the vehicle.

[Priceless ProSe]

well barely, less than $1500 ) in the past 6/7 months.

Wow, I am jealous, 200-300 bucks a month in CC use would ruin me, but to you its akin to none! (Just pullin your leg, kinda)

[Lajazz947]

Wow, I am jealous, 200-300 bucks a month in CC use would ruin me, but to you its akin to none! (Just pullin your leg, kinda)

I know, I know but its all relative.

It's REALLY nothing to most of my friends.

[Lajazz947]

Regarding the litigation, are you suing your "friend" for the 300k? If so wouldnt you want to see how that played out (maybe you would no longer need BK). If the case is that you are suing your old associate for a large amount of money the trustee may very well wait to see what happens with that case.

Yes, suing him but its going to be a LOOOONG time before it gets straightened out so it might be a moot point by then.

I just filed the lawsuit in 1/08 in Sacramento in a very crowded circuit court.

Can a Trustee do this? I mean make me wait?

[Lajazz947]

Also the 40k payment to an associate would be a red flag as well, I would assume the trustee would go after this money if you filed within a certian timeframe.

In regards to low income and a high amount of debt, I believe it is the sole responsibility of the creditor to prove fraud in application, not the trustee. In general fraud is extremely difficult to prove (meaning fraud at the time of application).

Lastly, On one of your vehicles you stated it was paid but you owed money on it to an associate, could you elaborate on this? Did you bought it from a dealer/finance company (or payed outright) and then used it to secure a loan from an associate? The trustee will defenitely want this clarified, and your answer may affect what happens with the vehicle.

I gave him the money in 3/08 so I expect a fight.

The car was purchased with money he lent me. I will definitely clarify it as needed for the TT.

[Priceless ProSe]

If the car was bought with money a friend loaned to you then was there some type of paperwork listing the car as security for said loan? If not then wouldnt the associate be considered an inside creditor with an unsecured claim against you? In this case I think if the exemptions dont cover the car (were talking chap 7 of course, for now) the trustee would take it and sell it for distribution to creditors.

Not to put you off, but this case seems like theres alot of stuff the trustee will want to look at. Income way above state median, large amount of unsecured debt, payment to inside creditors, loans on property that would otherwise be taken, and pending litigation. This obviously doesnt mean anything, but you should defenitely be prepared to provide alot of paperwork to the trustee and listen carefully to your lawyer. Be prepared to prove all the expenses you list that you claim brings you within the means test, be prepared to show paperwork for loans and payments to associates, etc, etc.

I personally dont know about the trustee waiting for a court decision, but there has to be a reason they ask several times when filing if you have pending litigation against someone, I personally would wait outside your house till the cows came home for 300k! The cynic in me thinks perhaps you are trying to wipe out your debt now in preparation for a 300k payday. Thats not meant to be offensive or accusatory, but if I can think it whos to say the UST wont. Make sure you are honest in all your dealings with the court, trustee and lawyer, that way they wont have to think such things. If you let them know about the litigation the worst thing that can happen (in regards to this specific matter) is they will postpone until you got the money and distribute it to the creditors. But at least you wont have to worry about your creditors coming after you while you wait for the decision. I think the old saying "prepare for the worst and hope for the best" is a good one.

[Lajazz947]

It definitely has a note attached so I have made it as " Legal " as possible.

[Priceless ProSe]

Would this then become a secured debt which you could reaffirm to keep the car? If so that would seem to be a huge loophole (im not talking about you, just in general). All anyone would need to do for any high price property would be to say a freind gave them the money for it, and produce an agreement between the two parties, allowing the debtor to keep said property without using any exemption. Maybe the UST would want to see proof from the creditor (friend, etc.) that the money came from them to make the purchase. I guess this post isnt really helping, just some more questions that popped up in my mind.

Whatever happens let everyone know because its very interesting and your likely to learn alot going through this.

[Lajazz947]

No, it is actually helping. Allot!!!!!

All the posts are.

Let me clear a few things so that there is a clear understanding........

The $300,000 that I am in court for was IRA money that was protected anyway. The difference that I expected and the debt I incurred was for money that was to be paid to me upon the development of the property that my investment was SUPPOSED to go to and wasn't.

My mistake was relying on a promise of money to be received and using lines of credit, both secured and unsecured when all I got was excuse upon excuse until I found out the truth.

So...the trustee would and creditors would not be able to get their hands on the $300,00 anyway. I can explain it very specifically.

The money that was used to remodel the house also came from a combination of a second, a refi as well as some unsecured relying on the land deal as promised.

I have absolutely NO expectations that I will get anything more than my $300,000 if anything at all since he may file BK and lose all the money in the LLC that he used.

I understand the TT's concern though and I sure see what you all see but I assure you that I can explain it away.

I have SO much documentation that it will make anybody's head spin.

as far as the car goes the money was lent to me from a line of credit on my associates home so it is fully verifiable.

As always, please bring these issues up, they help allot and I never take it personally.