What should we do?

[Liz]

Hello all.

My husband and I are going to be filing BK probably sometime next year.

Here is my dilemma....we are contemplating purchasing a mobile food service unit (concession trailer type), as our primary means of employment.

If we purchase this, should we buy it/register it in our adult daughter's name, therefore we would be her employees or would it be ok to get it in our name? I'm worried about putting it in our name because I don't want to run into any problems once we file BK with it being classified as an asset and us having to "buy" it back from the Trustee, or worse yet, it being taken away, even though it will be our primary means of employment and we would need it in order to make money.

Any advice on this would be appreciated! Thanks!

[Priceless ProSe]

Hello all.

My husband and I are going to be filing BK probably sometime next year.

Here is my dilemma....we are contemplating purchasing a mobile food service unit (concession trailer type), as our primary means of employment.

If we purchase this, should we buy it/register it in our adult daughter's name, therefore we would be her employees or would it be ok to get it in our name? I'm worried about putting it in our name because I don't want to run into any problems once we file BK with it being classified as an asset and us having to "buy" it back from the Trustee, or worse yet, it being taken away, even though it will be our primary means of employment and we would need it in order to make money.

Any advice on this would be appreciated! Thanks!

Buying it in your adult daughters name would be fraudulent, like hiding of assets and if they found out it would be no different than if it was in your name except it looks much worse and could get your whole case dissmissed.

I cannot comment on whether or not they would take it being that it is your primary means of income, because I do not know.

Some things that might help others answer your question: what is the the cost of the concession trailer (this will show if it can be exempted)?, Will you pay for it outright or finance? What state are you in?, Do you have other assets which would use up your exemptions?

EDIT: just saw your in GA! sorry

[MomIcantFindmy]

Check your states exemptions on tools of the trade. It might be exempt.

[TEW]

Liz
How do you plan to buy the trailer? Then where are the funds coming from to buy it back from the trusty?
Are you going to use some loans to setup this business?

[FreshLikeADaisy]

Liz, if you buy it with credit and plan to reaffirm the loan, it should actually be okay. The problems arise when you buy it outright, own it completely, and there is equity in it for the trustee to liquidate by seizing and selling it.

Honestly speaking, because this is a business related issue, I think you should avail yourself of some free atty consults. The risk is too high to guess at it: if you guess wrong, you could lose your entire investment and means of employment in one stroke.

But whatever you do -- and consider this carefully, because it's the kind of advice that will save you untold misery -- do not even consider titling property in someone else's name in the year prior to bk. Even if they were to title it back, it could easily be construed as outright fraud by the bk court, which would open you up to all sorts of legal hassles, not to mention getting your bk dismissed. I don't want to be harsh, we've ALL had these little ideas from time to time , but if you're even thinking about filing bk, make sure that ALL your financial transactions from this point forward are as fair and honest and aboveboard as you can possibly make them. Why? Because they WILL be scrutinized. I'm so glad that you posted this question.

I mean no offense -- please don't think I'm slamming you for asking -- but I couldn't not warn you. I wish you every success!!! Good luck!

[Liz]

We would be purchasing the mobile food trailer cash, mostly with money that my brother owes me. Cost is in the vicinity of $7k - $8k.

I moved from FL to GA about 6 months ago, so from what I understand (because I plan on keeping my house and cannot apply FL exemptions to GA homestead), I could take either federal or GA exemptions. Federal exemptions are better than GA. If website I looked at is correct, Federal exemption, tools of trade is $2025, GA is $1500. Therefore, I would be over the exemption amount if we bought this in our name.

I may not have the money to "buy it back" from the trustee later if it gets taken, that's why I'd rather save myself the headache later and do it the most beneficial way for me now.

Our daughter has the money to buy it, so I'm not sure how if she decided to buy a mobile food trailer and let us work it for her, how it could be possibly deemed fraudulent since she has the money to buy it anyways? We would set it up as us being employees of her business. It's not uncommon for children to help their parents and vice versa, right?

I'm not trying to get over the system, but like anyone else here, since we are in this cluster f^&* of a mess that we are in, going forward, I'd like to at least make a smarter decision than what we have made in the past!

[Priceless ProSe]

"We would be purchasing the mobile food trailer cash, mostly with money that my brother owes me."

"Our daughter has the money to buy it, so I'm not sure how if she decided to buy a mobile food trailer and let us work it for her, how it could be possibly deemed fraudulent since she has the money to buy it anyways? We would set it up as us being employees of her business. It's not uncommon for children to help their parents and vice versa, right?"



I think it would be fraudulent because the purchase money is money owed to you by your brother. Im not saying your doing this purposely, but it might turn out real bad if someone were to do this. There is little paper trail left between family members but you never know right? Personally I would find out if you have some type of "wildcard" exemption that wasnt being used elsewhere. Also, I agree that it mgiht be good to finance it now. 2 reasons, one you most likely can keep it, two if the business doesnt work out in the next year you can surrender the property in the BK with no hit against you (like protection right?), oh also if you did reaffirm the loan for the cart it could build your credit afterwards. only con is ur paying interest.

You should talk to your lawyer about what you can do with the money ur brother owes you if you dont want to lose it.

The "smarter" decision for the future is to follow fresh's advice. Like she said, we all think about these kinds of things but its not worth it. And if its hard to make it sound good now just imagine explaining it in front of the UST.

[Liz]

Thanks FreshLikeADaisy. I think we were writing at the same time, so I didn't read your post until I had submitted my last one!

I guess I'll go see some attorneys.....I've been trying to put it off because just the thought of going to see any turns my stomache into knots! Even though I know that they have seen hundreds and hundreds of clients in my or worse situation, I can't help but think that they are going to view us being losers for having to file bk! That's why I thought I'd get some advice here first, and save attorney consults for later, when I am closer to having to file.

[Liz]

Thanks Priceless....but our credit is beyond bad! LOL - so, unfortunately, we couldn't finance a piece of gum! LOL...Otherwise, that would have been my first choice because then, like you said, I could have included it in the bk if it didn't work out.

I'm not worried about the $$$ my brother owes me in terms of it being traceable.

[Priceless ProSe]

But if you are planning on buying something in your daughters name with money your brother owes you that is exactly what you should worry about. Look, what im trying to say is, I know your apprehensive about filing BK, and you want to keep everyhting you can (we all do), but if you go down the road you are suggesting I foresee alot of sleepless nights.

Im not saying I get mad when people beat the system, Im saying its perhaps not as easy to do as one might think.

How about we just have a "do-over" , im sure your here for the same reasons as all of us, so I welcome you (as I am new myself).

[FreshLikeADaisy]

No problem, Liz. I wish you every success!

BTW, when you see the atty(s), also mention that your brother owes you money and how much, and heed his advice in regard to it. You would be absolutely amazed at what trustees can uncover: they get paid a percentage of all assets recovered, so their next meal depends on finding precisely what we'd like to hide.

I know this may be hard to believe, but YOU, the average consumer debtor, are actually the lowest hanging fruit in a trustee's eyes, not the well-represented asset-heavy multi-millionaire businessman who comes into bk court with a carefully planned and executed bk strategy. So please... be very, very careful with thinking in terms of traceability. You'd be amazed. And I'd really rather you weren't amazed that way, if you know what I mean.

Please don't worry about your bk in an atty's eyes: your shame is their glory, your loss is quite literally their gain. It will not be anything like trying to anticipate a friend or a family member's reaction; this is their bread and butter. So don't put it off, even if you won't file for a year. You don't have to commit, you'll get some good advice, and you'll be able to avoid many of the pre-bk pitfalls people run into by planning and strategizing well in advance. It's well worth your trouble, even this early in the game.

Good luck and best wishes to you!!!

[JRScott]

I"d ask a lawyer about those exemptions.

Now I can't be certain but the normal rule is that if you have not lived in a state for 2 years then you use the previous state's exemptions. Now GA might trump that I can't be sure .

However GA's tools of the trade exemption is only 500 dollars so that wouldn't save it.

The Homestead allowance for GA is kinda low 5k (10k for married couple I believe) but if not used for a homestead can be applied to any property.

Anyway your best bet is to seek out 3-4 Bk attorneys in your area and run your situation before them. And see what they advise is the best solution for your case.

[Liz]

Thought I'd update everyone on this.....

So we went to see an attorney this a.m. Boy do I feel alot better after seeing him, as he answered all of the questions that I had initially been stressing over for awhile now!

In a nutshell, the attorney said that it would be ok to get the concession trailer in our daughter's name! He said it would not be deemed fraudulent because we are not transferring any property to her....she is buying it, titled in her own name, from the start. We are simply working it, sort of like being silent partners, but the concession trailer itself could not be taken away or looked upon as equity, as it is not ours for the trustee to take. The attorney said that we would be in bankruptcy, not our daughter and she can do whatever she wants, and since she has the money to buy it, there would not be a problem. I asked him if it would be ok to have her give us a 1099 at the end of the year, and he said that was fine.

He said not to even mention the money that my brother owes me! As long as it is not given to me by check or anything, which it is not, who else besides me needs to know?! BTW, my brother has been paying me cash, which I have not deposited in the bank, so there is no trace of it. Also, since we wouldn't be filing until next year anyways, on the slimmer than slim chance that the money that my brother owes me came up, it could easily be explained as our using it for living expenses, which isn't far fetched. He said it's only $7k that my brother owes me, not $70k, so it's not a problem anyways.

[liz417]

I'm glad your attorney answered all your questions...now it's the waiting game until you file....

Good Luck!

[TEW]

good luck Liz