Father Loaned Me Money After Filing CH7

[catdance23]

I have another question. I filed on 7/17 for ch7. I had to pay the rest of my atty fee at that time which means I didn't have enough for the security deposit on a rental place. They wanted it right away and couldn't wait two weeks until I got paid because they were nervous about renting to us. My father was nice and wired the money to us. My 341 is scheduled for 8/25. Can I pay him back before then or do I have to wait until after?

[soleprop]

personally i'd talk my father into seeing that wire transfer as a 'gift' towards having a home until after your 341. then you can pay him back at a later date if you feel the 'gift' was too generous.

note i am no expert, that's just what i'd suggest.

[catdance23]

That's what I was thinking. I hate owing money to family but I figured that was going to be the best option. Luckily he is well off with his retirement funds so it's not like he is going to be starving until he gets that money back.

[hnhlvr]

If you pay him back at this time it could show preferential treatment.

How much money are we talking about? A few hundred or 1,000+? If it is the latter, maybe list him as one of your creditors (lol!) then pay him back on the side. Like Soleprop, I'm not expert though. You have to talk to your attorney.

Since you borrowed the money so recently knowing you'd file, that'd probably require you to pay him back anyway, so listing him as a creditor will demonstrate that you are being honest.

[lrprn]

Can I pay him back before then or do I have to wait until after?

Since your dad gave you the money AFTER you filed, this debt is not a part of your Ch 7 filing. Therefore there's no preferential payment involved. Also your father cannot be added to your Ch 7 creditors list - again, this debt is post-filing.

Your Ch 7 estate is set on filing day, so technically you could pay your dad back now. However just to be 100% safe, I would wait until after your 341 to pay him back. You never know what kind of questions your trustee might ask during the 341. You are under oath and don't want to lie - that could make explaining why you have the money to pay your dad back right away after filing but can't pay back any creditors a tad uncomfortable for you.

[catdance23]

Thanks for all the feedback. I borrowed $2K from him before I filed and he is listed as a creditor. I borrowed another $2K from him after I filed. I wanted to pay $2K back right away and then pay him monthly installments for the remainder for the next couple of months. If I don't pay him back until after the 341 hearing will it look bad that I have that money in my bank account?

[AngelinaCatHub]

I agree with ‘lrprn’ that the “advance” of your own money was after your filing. All he did was advance you your paycheck that you turn over to him. I think IF asked by the Trustee, your explanation of the timing for something essential to your welfare (roof over head) is certainly not a luxury item and that you would have lost a hard to get apartment without your PAY ROLL ADVANCE. I wouldn’t even consider calling it a loan. (technically it is, but morally explainable). ‘Hub

[catdance23]

Thanks for the advice. This is helpful.