Selling house before 7 ????

[tah]

I think I'm going to try this.

My home is worth about 220K and I owe 173K, so there's about 47K in equity I'd like to "get out" before filing.

I'd like to sell and move to a rental, cut my expenses and then file the 7.

Here's my question. When I file the 7 I'm sure the trustee will want to know where the money went. Other than claiming I gambled it away I can't thing of how to keep the money.

Any suggestions?

[tdawg]

put it in a retirement account? You'd probably have to wait some time before you'd file I'd imagine though. I'm sure someone else will chime in.

[tah]

I think I read somewhere that you have to show when money went into IRA accounts. If recently deposited they can "get" the money.

Seems like I could blow 40K at Atlantic City pretty easy...huh?

[frogger]

I think I read somewhere that you have to show when money went into IRA accounts. If recently deposited they can "get" the money.

Seems like I could blow 40K at Atlantic City pretty easy...huh?

You're asking for trouble........

[aljohnson007]

Why not take the equity and pay off some creditors and then you may not have to file bk.

[AngelinaCatHub]

Just to "get rid" of money to keep it from creditors could be interpreted as fraud. You do not want to open that can of worms.

IF you CAN sell your house and get a profit, stockpile exempt items. Remember capital gains taxes. You will need to live somewhere so perhaps paying rent utilities in advance, but to hide these funds will be impossible or at the worst, criminal. 'Hub

[tah]

IF you CAN sell your house and get a profit, stockpile exempt items. Remember capital gains taxes.

In oreder for Capital Gains to come into play I'd have to sell my house at a profit from the original purchase price. Not gonna happen!

Another thought I had..........

The "look back" period on property sales for BK is two years. If I cut my living expenses I can pay the minimum payments on my CC's for say 18 months. About the time they start getting nasty (the CC companies)..........file a 7.

What do you folks think about that?

[StartingOver08]

The look back period for REAL ESTATE TRANSFERS is TEN years.

Different types of transfers have different look back periods....some are 6 mths, some one yr, some are two yrs.

[tah]

The look back period for REAL ESTATE TRANSFERS is TEN years.

Different types of transfers have different look back periods....some are 6 mths, some one yr, some are two yrs.

Well you're talking transfer...is that a sale?

Because......I downloaded the BK forms and they ask about things sold the last two years.

Also there's a thread on this forum where you can download the forms with notations for the Trustees. Sort of a "what they look for" and are trained to look for. It has a two year phrase there also.

FWIW....I'm in Virginia

[tah]

From what I've gotten off the forms.....

List all property transferred in the ordinary course of the business or financial affairs of the debtor, transferred absolutely or as security within two years immediately preceding the commencement of this case.....
or:

Transferred by debtor to a self-settled trust or similar device of which debtor is a beneficiary within ten years......

[StartingOver08]

A sale is a transfer. It is not the fact that you are selling the property - you can buy and sell property prior to bankruptcy to third parties for market value. The sale is public record and easily traceable. It is what you are planning to do with the proceeds:

Here's my question. When I file the 7 I'm sure the trustee will want to know where the money went. Other than claiming I gambled it away I can't thing of how to keep the money.

Any suggestions?

[tah]

I understand what you're saying and I believe you also understand where I'm coming from. I got divorced just before this recession hit and put 50K down on my house. I've run up my credit cards to the point that it's become futile trying to think about paying them off. While using credit I've also sold my Porsche, a few Rolexes and other assorted high-end goodies just to survive.

I've finally gotten a promising job that will provide decent income for the next 2 ~ 3 years (recession driven!).

If I don't have to list the sale of my home because it's been two years, maybe the questions of "where's the money" will not arise?

Spending 40K or so over two years is not a hard thing to do and to do so without really having anything to show for it..........not difficult either.

Simply put I don't want to "kiss" my 50K equity/downpayment goodbye because an agressive trustee sees some money to be had. Also if I file a "7" and then sell my home, I'll have a hell of a time trying to get a lease.

[keepmine]

How much equity does your state exempt?

[tah]

$5000........+$500 per dependent living with me

Yeah HUGE money!