I am thinking of filing.

[kennyg]

Hello everyone,

I am thinking of filing for chapter 7. I consulted with attornies and they said i am eligible to file for chap 7. I made about 20k per year and i own about 50k. The last time i transferred any was more 6 months ago except the recent transaction mentioned below.


I have a few questions. i recently transferred 5k (about a week ago) from my credit line to my checking account to repay my sis whom i borrowed more than 10k from and she needed her money back right away. I lost everything on stock. I wonder i should wait 3 months (or 6months), and would they still that raise any eyebrows if i were to file after 90 days or 180 days from the date transfered above? One attorney mentioned to return it but i don't know it is such a good idea since i already repay to my sis that money already. If i transfer right away

In addition, in the meantime, i will have to withdraw money (cash) from my checking account for my rent, food, utilities etc since i am sharing a room and my landlord wants cash. Would that be something that they(Creditors) would challenge?

Thank you for your suggestions. I am so depressed and angry at myself right now. I dont' know how i could get to this bad. I was in a very good shape before investing

[xboxfan]

Time should be able to solve the 5K transfer, but I think that the biggest problem you will face is the fact that you paid the money to your sister. I think this would be insider trading and they will go after your sister to recover that amount to distribute to your creditors. I'm sure one of the experts around here will come by to explain it better.

Don't be angry at yourself. It's not your fault the market crashed! Feel good in the fact that you've started seeking out the solution to your problem. You've got a whole network of support here! :-)

[PoorGrammyinBK7]

Its not that you have done anything wrong or can't file. The problem is the "lookback" period for paying back an insider (when not paying other creditors that are unsecured) is at least a year. They can look back even further from what I have read. The trustee could sue your sister to get that money and pay other creditors (plus a nice chunk of money for himself of course). So if possible, you should wait until it has been over a year from that "insider payment" to file. If you are in a tight bind and can't wait, I guess you'll have to warn your sister of what may happen.

[kennyg]

wow really? So they would look more than 3 or 6 months back in this case?

Now having done that would they look back and give my sis problem if i were to slowly withdraw the money (cash) say within 4 months about 1.5k each month to pay her back?

I also wanted to mention i don't have any asset right now (no car no house etc) and i am about to graduate from grad school (in 2 years i hope) would this bankruptcy filing affect any job prospect in the future? Is there any job that would disqualify me because of BK problem? How about if you are thinking of med school? Would they not let you borrow money for school?


For those who already filed, according to what i read you can get even a mortgage after 2 or more years, is this true? Is your life ruined by BK?
Please help

[kennyg]

in addition, would they make any trouble if that same amount of money were to put into Scottrade account? I withdrew the money orginally to pay my margin call on Scottrade but the stock plummeted and they sold me out before i can put in and my sis really needed her money....

Sorry i know i have a lot of questions but i am very concerned and have lot many nights of sleep so far

[kennyg]

Besides my attorney, who could see my 3 (or 6 months) of my transactions from my checking account? Would the trustee question certain withdraw say above 200, or $300 for examples?

Thanks again...i hope you are doing ok. Life sucks

[Trixie007]

Now having done that would they look back and give my sis problem if i were to slowly withdraw the money (cash) say within 4 months about 1.5k each month to pay her back?

The problem you'd be most likely to run in to is that you need to be able to say where all that money went. You just gave her 5k, and you're looking at giving her another 6k over the next 4 months. That's 11k in less than 6 mos. You might be able to slide by with that, but should consider the risks if for some reason a flag is raised and the Trustee asks for additional bank statements. Some filers have had to provide 2 years.

Many people have said on here that if you don't hide anything you don't have to worry when you file. I know you just want to pay sis back, but this is fraud. It's not just an insider payment with a one year look back, it's fraud when you pull out cash to hide that you are doing so. Tough to prove maybe, but I would be extremely nervous in this situation.

[deadbroke99]

You may be asked to provide bank statements also.

[kennyg]

trixie,

Sorry for the confusion. What i meant to say were if i were to withdraw money from the bank 2k at a time instead of 6k withdraw all at once and return them to her slolwy (maybe in the time frame of 2,3 months) would that raise eyebrows? No, the total i paid so far was only 6k to my sister.

here is the question I have 8k in my checking account right now, should I
a) return the 5k back to my credit line (which i borrowed 5k from the bank about a week ago)
b) keep it there in my bank account, and what would happen if i were to file? Do i lose them all, this is all my assset, i don't have a house car or anything of that sort
c) If i were to put in my broker account to buy some stock, would they gonna go after this broker account ? Again i recently lost more than 100k on stock

Thank you for your help

[fltoo]

Are you a daytrader or is the 20000 income from a job?

If there is a paper trail on the original money you gave your sis, you need to wait one year before you file, due to an insider preferential payment. Go ahead and pay your sis the rest of the money in cash increments and wait one year from this last payment. It sounds like you HAVE to pay your sis the money back quickly. IMO it is best to get this monkey off your back and wait it out with only yourself in financial straits.

If you are an experienced trader, you should know never to purchase stock with borrowed money. Even meeting margin calls with borrowed funds is dangerous. I know the market took a dive, but investing with borrowed funds is a problem even if the market is great.

Why even think that you should take this last 5000 and invest it in a volatile market? Anything you invest presently should be because you are buying stocks "on sale" and should be looked at as a long term investment, not a get rich quick scheme.

Investing in the forex market is growing in leaps and bounds right now due to newbies thinking they can get rich quick and there are tons of scams out there. The forex market is probably the next place where people are going to lose a lot of money.

My advice on the cleanest way out of your mess is to try to make yourself as judgment proof as possible while waiting one year or more to file.