Not sure if this is a big deal or not

[debtsucks]

Back in April we payed back my Sis in law 2,000 she lent us to move from California to Illinois. I just saw that in someone elses post that the trustee asked if anyone has been paid back within the year, my lawyer never asked us that when we went in to retain her. Is this something I should be worried about? We aren't filing until February the earliest. How would they even know that we paid her back in cash? Also I had a bank account with Chase back in October that I closed out only because we don't really use it anymore am I going to need statements from that to?

[tkharvey]

We just had our 341 on MOnday. Trustee did ask if we have paid any relatives any money the past year. I don't know if it is a big deal or not because we didn't pay anything. You are testifying under oath so legally you're required to tell the truth. I'd call your attorney asap.

[LALADY]

Trustee does ask that question.

I provided my attorney with 1-2 years worth of paperwork, depending on what type of paperwork he was looking for. He was very thorough in his review of my financial situation before the petition was filed. He wanted to avoid having any surprises. Smart move on his part.

[backtoschool]

Any money paid to a relative within a year is considered an insider payment and can be taken by the trustee. The trustee will go after the relative for the money.

[MSbklawyer]

Is this something I should be worried about? We aren't filing until February the earliest.

Since your sister-in-law is a relative, she is an "insider" for purposes of preferential payments. That means the trustee can look back one year from the date of filing and pull these payments back into the bk estate. In other words, your sister-in-law would have to pay this money back. It won't be a problem if you wait more than one year from the date you paid her back to file.

[bktmom28]

We are sort of in the same situation. Borrowed $1200 from my Husbands gma to pay bills after making a double house payment by mistake, paid her back promptly because she withdrew the money from a CD and needed to repay it back, and then when we decided to file bk 6 months later, realized it bit us in the butt. Now the TT might not go after it, if our tax refund isn't very large as that is our only asset, but there is still that chance. We are just going to set aside some money that we can pay her back with should they go after it. I hope they don't as she lost ALOT of money this last year in the stock market etc, and does not have the money she used to. I wish that we had paid her back in cash and told the TT it was a gift. Not 100% honest, but I dread the strain it will put on our relationship should they go after her.

[ConfusedinOC]

If you make payments to an insider while you are still making all other payments to creditors will the insider still be required to back the payments? I would think not since everyone is getting paid their fair share.

[bktmom28]

Yeah, that's a good point! At the time we paid back my husbands grandma, we were still current on all of our payments, then all our interest rates got jacked up. That's a really good question! I don't know!

[debtsucks]

If you make payments to an insider while you are still making all other payments to creditors will the insider still be required to back the payments? I would think not since everyone is getting paid their fair share.

Well that was kind of what I was wondering. We paid her back in March or April, but it was in cash. My husband had gotten a bonus check and instead of depositing it we cashed it and deposited some of the cash and then paid her. At that time I wasn't even thinking of bankruptcy, and we just stopped paying on all of our credit cards in Sept/October.

[music12]

the statute does not care if you also paid non-insiders. anything you paid back to an insider is fair game for the trustee. the trustee can go after the insider for the money, or alternatively you could offer to make payments totalling the same amount.

[StartingOver08]

Remember, the Trustee is looking to fund the BK estate - and will go after the low hanging fruit. Payments made to insiders within the 12 months leading to the filing date are easy for the Trustee.

[AngelinaCat]

We paid $5,000 to a god-daughter and $1,600 to a SIL about five months before we filed. We did it without thinking, and there had been no guidance of any sort from our attorney. The trustee did offer us the option to repay these insider payments but it had to be a lump sum of $5,000, or the trustee would go after the god-daughter and SIL. Relations with SIL and DD are rocky at best, so we agreed to the repayment. Fortunately a yearly stipend from a retirement trust fund comes in January of each year and we made the lump payment from that.

[coolmom04]

I am having to deal with this as well. When we go ahead and admit that YES we have indeed been paying my MIL $100/month for the past year... can we just go ahead and say, "Hey trustee, here's $1,200.. please don't go after MIL?" And take $1,200 money order or cashiers check with us at the 341?!

[BrokeMike]

Can we use exemptions(wildcard) on money paid to an insider?

[coolmom04]

QUOTE=BrokeMike;359061]Can we use exemptions(wildcard) on money paid to an insider?[/QUOTE]

Ohh excellent question!! I'm certain someone knows the answer