Questions asked by attorney...why?

[mimic]

Had two questions that threw me that were asked by attorney when I visited w/him two days ago.

First, "Have you sold anything of value over the last two years?"

Second was "Have you received any money from family members in the last two years".

Origionaly answered no, but after days of thinking both would be answered yes. Sold tractor to keep roof over head and parents did help from time to time (thank God). What are the purpose of these questions? What are they looking for?

[music12]

it's funny how they phrased it. "have you sold anything of value". well, if it didn't have value, you couldn't see it!

with the first question, i think they are looking for loss of assets. for example, say you had some jewelery that you sold for $100,000 (yeah, i wish). then they would ask you where that money is. if you can't explain where it disappeared to, you've got a problem. if you sold a tractor and used the money for necessities like you say, you have no problem.

as to money from family members, i am not sure. they might be looking to see if you are getting regular monthly help from them, in which case they might look at that as income in the means test. and if it's a really big amount of money, again you'd have to explain how you used it.

[tinfoilhat]

They want to know why, if you sold anything, you didn't use the money to pay your creditors. They don't care if you starve, creditors>food.

If you think those are weird questions wait til later on if you file and fill out paperwork.

[justbroke]

First, "Have you sold anything of value over the last two years?"

Looking to see if there's anything of "significant" value that you sold. This is something that Trustees like to look into. That is, did you sell, say, a car you owned and was worth $20K, for just $5K? This is what they are looking for.

Second was "Have you received any money from family members in the last two years".

Looking for "insider" payments or loans made by family members, that you may have paid back prior to filing. You cannot pay back family members over other creditors. These are insider payments/preferences, that the Trustee loves to go after.

[mimic]

Tractor was $14,000 and occured around 9 months ago. Sold for cash and no paperwork. Live in the country and is kind of the way things are done here. On a handshake (wish CC were the same way. :-) ) Some of that money did go to pay creditors.

The parwnts have been kind enough to give approx, 2000-2500 a month for the last year as well. No loan and in cash also. Dad is from the depression generation and keeps money under his matress I think.

Do you think this could cause a problem?

[music12]

the tractor situation seems ok, as it was a long time ago even if you used it to pay creditors.

those are very generous parents. i think if you report it, then make sure also to state that this generosity will stop now that you are filing bk (there is a line in the income schedule where you can write any expected changes). your parents are under no obligation to pay your creditors, and that's what they would be doing if they keep this up, because it would be like income for you, and it could get you to have disposable income. so tell your parents to stop giving you cash until your bk is done.

[mimic]

I should have clarified (appears to be my problem lately w/my mind spinning and all). Parents gave money until about 2 months ago when my husband found a job. We lost our store and he had been unemployed since Sept.

Would this "gift" be considered income for means? If I put down as loan would they need to be included in bankruptcy? Just make the means test now....any more wounld put me over.

[AngelinaCatHub]

You did not deceive anyone on purpose. After hind site, your tractor was used for needs that are exempt and without paper trail. Not to state any suggestion to hide or defraud, but being near a year ago and that the money was used for some payments to creditors, you have nothing to worry about. Yes, also, take no more loans from the folks. If they wish to help you, have them purchase you food, blankets, exempted needs directly and not money. If you need gas, have Dad deliver it to you in a five gallon can, not into your gas tank from his pocket. You MUST NOT pay them back while in bk. At this time, I would say no more about those two little items, as that is not significant monies that a Trustee is looking for. 'Hub

[mimic]

Thanks Hub.

One more item that I don't think will be a problem, but who knows now.

Store that went under, a corporation, had equipment sold at the end. Total amount was $17000 or so. When corporate taxes were filed I mad it aware to CPA that funds went to me directly. I had already loaned over $180,000 of my own money into business (some of CC debt trying to get discharged is from business also in my name). When corp. taxes were filed it showed I had incurred a loss of $80,000 for 2008 alone. This amount included the monies retained for the equipment sold.

Not income, just recoup from loan. I haven't made a dime unfortunately. I have been living on this money as well for the last 9 months or so. Should this be mentioned as I have corp. tax return backing?

[StartingOver08]

Yes, you need to mention all of this to your attorney so you and your attorney can have a strategy session.

Part of your filing is the demise of your small business, you will want to include your business debt in case the creditors decide to come after you personally. Your filing is a little bit more complex then the average filing - you may have to wait until some of the issues have aged a bit, but we don't really have enough information to help you with that yet. The best way to handle it is to work with your attorney to make sure he is aware of everything.

The Trustee will be interested in your small business financial details(even if it is closed). The Trustee will want to know where the proceeds have gone - so have your records handy and have a plan worked out with your attorney in advance so you have a smooth BK. The Trustees have a tendency, at least in my district, to do a very detailed look at those of us that have small businesses and are filing personal BK.

[mimic]

Business closed end of last Sept/beginning November. There were no proceeds except for equipment sold and mentioned prior. (Oh how I wish there were.) I can provide tax returns for the two years the business was open, showing that we were just throwing good money after bad, trying to keep the doors open. Stupid me. Payments were made on debts up till doors closing.

As for timing, all my problems ralate bach to 9 months ago.

Thank you everyone for all your imput.