WEIRD SITUATION need Help, TT trying to recover 14k from another party..

[music12]

the latest they can reopen is a year after discharge.

11 usc 727(e) The trustee, a creditor, or the United States trustee may request a revocation of a discharge - (1) under subsection (d)(1) of this section within one year after such discharge is granted; or (2) under subsection (d)(2) or (d)(3) of this section before the later of - (A) one year after the granting of such discharge; and (B) the date the case is closed.

[mysticspirit25]

Questions then...transferring assets to spouse.

Ok, we've covered the "fraudulent transfer" and insider angle. Let me ask a blunt question. Lets say I had $300,000 in my bank account, lets say I gave that to my wife tomorrow, and then she kept it for 2 years, I defaulted on all my credit cards, got sued, the whole 9. I filed for BK 2 years later, what would happen then, if I filed alone? That 300k is a preferential transfer, but 2 years have passed since I gave it to my wife. Assuming she did not file with me, would it still be a fraudulent transfer 2 years after the fact?

I am just trying to see what the actual cutoff is on transfers...1 year, 2, 10...unlimited???

NOTE, I would NOT do this, I am just asking for theory sake, b/c I honestly want to know how the courts would look at that 300k transfer, or even if it would have to be reported 2 years after the fact. (obviously I wouldnt file bk b/c I had money to repay...but what if she didnt give the money back or whatever, spent it, gambled it away, etc)

[JRScott]

Depends on a lot of circumstances, particularly state. If in a community property state it wouldn't help you at all as anything in either's name really belongs to both of them.

The initial look back is 1 year. However I have heard of them looking back 3,5 or even 10 years in some extreme cases. The longer look backs are more commonly done for real estate transactions etc but if they discovered the 300k that's certainly gonna raise some eyebrows.

[mysticspirit25]

lets take it a step further

Depends on a lot of circumstances, particularly state. If in a community property state it wouldn't help you at all as anything in either's name really belongs to both of them.

The initial look back is 1 year. However I have heard of them looking back 3,5 or even 10 years in some extreme cases. The longer look backs are more commonly done for real estate transactions etc but if they discovered the 300k that's certainly gonna raise some eyebrows.

Ok, here is another one, lets say I have 300k sitting in an account. My wife and I purchase a house in a non community property state, use the cash, I fall ill 2 years later and cannot work any longer, house titled TBE, the state has no homestead exemption but recognizes TBE, would this be considered an "insider" or "fraudulent" transfer, i.e cash on hand converted to real estate when filing 2 years later?

See the problem I am having with all of this is there appears to be no set "look back" period if the TT thinks something is wrong. There has to be a point when enough is enough. Now my example above is an extreme example, but I really am curious. B/c if there is no set look back period, lets say 7 years passed, and one spouse filed BK, but property is supposed to be protected by TBE, and trustee deems it fraud...how does the debtor protect him/her self??

[JRScott]

What's TBE stand for?

[mysticspirit25]

tenants by entirety, means each spouse holds a seperate 100% ownership in property. Courts have held that if property (accounts, real estate) is titled TBE, that a trustee cannot take it if only one spouse files bk and the debts are not joint with the other spouse.

[music12]

if you want more detailed answers to questions like this, the solution is to go look for published opinions about fraudulent transfers in bk. those would give you an idea of what the law says. some are available online, or you can go to a law library.

[HHM]

Stop asking hypotheticales. They are fairly pointless in the context of the forum. The best answers you will get are, it depends. Too many other factors and back ground come into play. Unless it is a "real" situation, you are wasting everyone's time.

[JRScott]

tenants by entirety, means each spouse holds a seperate 100% ownership in property. Courts have held that if property (accounts, real estate) is titled TBE, that a trustee cannot take it if only one spouse files bk and the debts are not joint with the other spouse.

Not all states have tenants by entirety.

[shabam]

I disagree, it was almost 7 months, she wrote the check as a cash advance to the dealership (AND MADE REGULAR ABOVE MIN PAYMENTS) to keep it afloat, electric, phone, new inventory curtailment payments, etc. She already settled with Chase and the husband has no intent to pay the TT, he has no assets either, as all cars on the lot are not owned by him, basically he is going to tell them to F*** off and sue, and if they do, he will file BK too. He has nothing to attach, she has been discharged and the Chase debt has been settled. She didnt have 2400.00 for a BK atty.

I don't think you comprehend the power of the Trustee. When it comes to BK, opinions are irrelevant. The trustee is not a creditor. If fraud is found, a debtor can be prosecuted for it. The 547 look-back period is 1 year the 548 look back period is 2 years. Very hard to get around that using the 7 month argument.

What is interesting about this situation is how can a Trustee claim abuse of 547(b) when your FIL is not a creditor? As such, how can your MIL have made an insider payment when there is no payment to be made or any money owed?

With regards to the 548, was the check made out to the business or your FIL directly?

This is interesting as anyone who made a BT to a spouse's debt could be in trouble, particularly if the spouse is not filing.

[mysticspirit25]

The check was made out to the business and the trustee's law firm is going after FIL directly.

[shabam]

The check was made out to the business and the trustee's law firm is going after FIL directly.

The trustee must assume that your mil tried to transfer credit/assets prior to filing. The way the law is written I honestly cannot see how he would get out of it. Has he seen a lawyer?

I have not seen any cases like this before. It is ridiculous that they can do that. If your MIL had owed him money or just wrote a check and not paid, I would understand it but for them to chase him under these circumstances, I believe is abuse of power.

I would assume couples transfer debt back and forward all the time, especially when one spouse is not listed on the other spouse's account who may have more favorable terms. Vice versa.

[shabam]

The whole system is skewed towards the trustee, UST and creditor screwing you whenever possible and we cannot do squat about it. I thank our politicians for enacting such terms to begin with. After all, those poor cc companies need all the help they can get. Unlike someone who is filing for bk. Obviously, the debtor filing for ch 7 has thousands of $$$ on the side to defend themselves. *sarcasm*

[shabam]

One thing that I have not been able to find any information on is the following scenario, based on your example:

If your MIL had paid your FIL's credit card (creditor), would this be considered an insider payment or a payment to a creditor?

The law cannot be stupid enough to have a 90 day look-back for your MIL paying her creditors (even with debt) but a 1 year look-back for her paying a spouse's creditor right?

[justbroke]

The whole system is skewed towards the trustee, UST and creditor screwing you whenever possible and we cannot do squat about it. I thank our politicians for enacting such terms to begin with, particularly those with an (R) who seem to be bought and sold like children.

Please don't bring politics into this discussion. A (D) is who signed it into law. There's enough blame to go around through years and years and years and years of Congress by all parties. Let's not skew what those 600 greedy geezers do in D.C. (Reminds me of the 5 Greedy Geezers that make up the IOC.)

I don't think the system is as skewed as many believe it is. There is a bar, and you can blame the people who filed years before the 2005 Amendments (BAPCPA). Those before us "abused" the Bankruptcy system like it was some sort of money laundering operation.

In the end, Bankruptcy is still a powerful debtor tool. One could still actually abuse it, if you plan carefully.