Payments to family

[wolverine]

I've got a question. If someone frequently pays for a grandchild's rent and groceries but that grandchild is not a dependent and not living with the grandmother, do the payments have to be considered insider payments or can they be gifts? If they are gifts, and in excess of $200 at a time, will the trustee sue the grandchild for the payments? The money, after all, is almost immediately spent on the grandchild's living expenses.

[NoMoreCards]

You asked this same question only a couple days ago.

Here is the link to help you find the thread

http://www.bkforum.com/showthread.php?t=50054

All the best

[wolverine]

Yes, but it is now not being disclosed on the expense Schedule J because it would not be deemed a necessary expense. My current question only pertains to Form 7, Statement of Financial Affairs. Should the payments be listed there?

[jribe]

I've got a question. If someone frequently pays for a grandchild's rent and groceries but that grandchild is not a dependent and not living with the grandmother, do the payments have to be considered insider payments or can they be gifts? If they are gifts, and in excess of $200 at a time, will the trustee sue the grandchild for the payments? The money, after all, is almost immediately spent on the grandchild's living expenses.

the trustee doesn't care that it's going towards the grandchild's expenses. They are looking for money that can be paid to creditors. You can't included "gfits" in your schedules either.

The trustee will specifically ask about any money paid to family members 2 years before filing.

Be careful with this!

And to answer the question: yes, they can go after the grandchild for the money given to them.