Couple questions

[bktmom28]

Hi there and thank you in advance for your help!

I have a couple quick questions before I submit my filing for BK. I have filled out the majority of our paperwork, but last May/June, we withdrew from our 401K to pay our bills. We had borrowed $1200 from my husbands grandma and needed to pay her back, as well as stay current on our other bills. We went through that so fast! Our attorney told us that we did not need to tell the trustee about it, but won't they question it as it was on our bank statement? I am not sure if she realizes it was a withdrawal on our 401K, not a loan.

2nd: We are thinking of selling my husband truck so that we have the money to pay our attorney. We do not owe anything on it and the fair market value is $4500. The credit in Oregon is $3000 per vehicle. Are we going to have to pay the trustee $1500 if we sell it for the $4500? Also, how do they know how much we sell it for? If a person pays in cash, how do we prove it the trustee?

I am sure I will have more questions, but I am not too worried. We made $31000 last year, and our states median income for a family of 5 is 79000. Even with the 401K withdrawal and other smaller deposits that were made we are no where close to that amount. Any words of advice would be greatly appreciate.

[backtoschool]

Any transfer of property close to filing will be looked at closely by the trustee, and will have to be covered in your exemptions. So if you sell the car now for cash, then the cash will have to be covered in your exemptions. Trustees want you to list all transfer of property going back two years usually. You will have to list the 4500 in your exemptions.

If I am understanding correctly, you paid your husband's grandmother $1,200 back on a loan over a year ago (may/june a year ago) by pulling from your 401k? If it was over a year ago it is not a problem. If it was this June however, that would be considered a preferential payment (ie, you paid your husband's grandmother before other creditors). Generally you should not pay one creditor more than another for a least six months prior to filing.

[bktmom28]

We did borrow from her just a few months back. My attorney did tell me that if the trustee wants to, they can go after the money. My concern is that they will go after her and not us. I do not want this to happen! I will pay if that is what they want, but she does not have the money. I just want to make sure that she does not have to pay anything. Also, we have set aside a little bit of money for moving as we are letting our house go in the BK, and we are using it for 1st months rent and security. It is not in our checking account. We have sold things here and there as well as received a few monetary gifts from our church. Are these things that the trustee will ask us about? I am so new to all of this and I am very stressed out! I don't want to hide anything but I also don't want to give away too much information. We are going to sell our truck for fair market value as well to pay our attorney fees. Is this going to be a problem?

[backtoschool]

We did borrow from her just a few months back. My attorney did tell me that if the trustee wants to, they can go after the money. My concern is that they will go after her and not us. I do not want this to happen! I will pay if that is what they want, but she does not have the money. I just want to make sure that she does not have to pay anything. Also, we have set aside a little bit of money for moving as we are letting our house go in the BK, and we are using it for 1st months rent and security. It is not in our checking account. We have sold things here and there as well as received a few monetary gifts from our church. Are these things that the trustee will ask us about? I am so new to all of this and I am very stressed out! I don't want to hide anything but I also don't want to give away too much information. We are going to sell our truck for fair market value as well to pay our attorney fees. Is this going to be a problem?

You are filing in Oregon, so it looks like both the $1,200 and the car are covered in your exemptions.

You get $7,500 cash/bank account exemption. You can put the car ($4,500) and the payment to your husband's grandmother($1,200) If you exempt those two items you will not have to worry about any look back period.

You also each have a $400 wildcard that you can use on anything, and have plenty for your household items, etc. ($3,000 for household items, $1,800 a piece for clothing and jewelry)

I would exempt both the $4,500 car cash and the $1,200 payment to your husband's grandmother. That leaves you $1,800 in cash you can exempt for your move, etc.

I think you are well within your exemptions.

[bktmom28]

Thank you! You have eased my mind!