staying in hotel shortly before filing chapter 7 bk

[ben1381]

I want to know what impact staying in a hotel for the Passover holiday shortly before filing Chapter 7 bk could have on our case. The reason we are doing this is because of my wife's severe arthritis and her needing knee replacement surgery and her inability to properly clean for Passover. The cost of the hotel stay is approx. 4K.The money for the hotel stay is coming from the following sources:
1. Collision repair check from automobile insurance company. We have decided that staying in this hotel is more important than having our vehicle repaired at the present time. This check is for about 1.6K.
2. The balance of the hotel stay is coming from me doing a premature redemption of IRA funds which are legally exempt. Would it make a difference if these funds pass through my checking account before going to the hotel. Any information on this subject would be very helpful.

[newbie2]

Excuse my ignorance, but wouldn't it cost far less to hire a cleaning service for a day or two?

I think that withdrawing exempt money prior to filing for bankruptcy turns it in to non-exempt money.

[BCA2009]

Excuse my ignorance, but wouldn't it cost far less to hire a cleaning service for a day or two?

I think that withdrawing exempt money prior to filing for bankruptcy turns it in to non-exempt money.

If it is spent before filing this doesn't apply. You only have to exempt assets that have on the filing date.

I think you would be fine. I can't see a trustee spending any effort on religion related expenses. Although IMO, that does seem a little extravegant to spend 4K on a hotel just before filing for BK.

I guess I would add the standard "consult with a local attorney" just to be sure!

good luck

[newbie2]

If it is spent before filing this doesn't apply. You only have to exempt assets that have on the filing date.

Thanks BCA2009 for clearing that up for me.

[ben1381]

Thanks for the replies. I also personally feel it is a bit extravagant but my wife is very insistent on it and said she would go without me if I refused! I'm NOT incurring new debt to do this, paying extra taxes(IRA 10% oenalty) and I am giving up the cosmetic repair of our car for the time being.

[momofthree]

How long are you staying? $4k sounds very extravagant and I can't imagine a trustee overlooking that amount of money.

[BCA2009]

I doubt there is really anything the trustee can do. You are not making a fraudulant transfer and you are not using credit for a luxury purchase, but I still would come up with a better story than your house was dirty.

It might cause the trustee to pick all of your other expenses and exemptions apart with a fine tooth comb, because it could appear that you have no concern about your financial situation. I could understand how the trustee might think, that someone whould would spend 4K on a hotel stay just before filing might be someone who also might be hiding other assets. I'm not saying it is true, just that appearances could matter.

[SMinGA]

One thought, about not spending the insurance money to repair your car. Is your car financed? If so, there could be some legal issues with foregoing the car repair. Consult your attorney...

[NoMoreCards]

I agree with hiring someone to do the cleaning for you, I am sure someone from your synagogue would be able to assist and do it in the manner required under your religious laws.

However if your wife is still insistent on staying in a hotel, the Passover is typically 8 days, add a day on each end that and it is 10 days tops. So at 4000.00 that would be 400.00 a night. I know New York is expensive, but you might be able to travel to a place a few miles away and get a much better price. I would think there are more reasonable places, that way you would still be able to fix your car even if it is financed.

Just my thoughts, I wish you the best.

[music12]

i think there must be other options. for example, maybe you could clean yourself and/or hire someone to clean. hopefully there is a jewish community in your area and someone would be willing to help. if there is a rabbi you trust, maybe they can give you advice. if a hotel is the only option, isn't there a cheaper hotel? or is it the only hotel in the area that is kosher for passover?

i don't think you'll have any trouble with it IF you can show that it was the cheapest option available to you.

financially, i don't think it's a good idea to take out retirement funds for this. find another way.

[Mensa1]

This seems to be asking for a problem. It really doesn't matter whether it is religious oriented or not; we all have religous holidays, even the TT and this seems to invent a problem that doesn't need to exist. The TT could object to the expense and attempt to claw back those funds. You could find yourself owing the TT 4K in order to obtain a discharge.

No amount of rationalizing is going to affect this situation. It will be the TT job and responsibility to recover funds from expenditures like this, IMO.

Now have a good time on the hotel stay, cause it sounds like you are going no matter what.

[music12]

bca2009, it's not a question of "dirty". on passover, jewish homes need to be free of hametz - it's different from just sweeping the floor...

[lovebirds]

The trustee may delcare that a luxury expense and may ask for you to repay that amount to the estate over the next few months after you file.

[ben1381]

Thanks again for all your comments especially Music12 understanding about Chametz I've already put a deposit on this hotel so there is no going back on it. BTW the hotel is not in New York but in Pennsylvania and I think the price I am paying is about average for an Orthodox Jewish Passover stay. I guess the worst that can happen is that I would have to claw back 4K from my IRAs into the bankruptcy estate and my auto lender could make me repair the car if they find out about the accident but I'm 100% current with them and plan to keep the car so only if they somehow find out about the accident in the BK would this be an issue. Considering the amount of unsecured debt I will have discharged and the marital peace it is buying me it is worth it!

[music12]

hi ben, you're welcome

if 4K is standard for passover hotel stays and you can document your wife's condition, i think you should be fine because then it's not a luxury but a necessity. however, don't underestimate the power of antisemitism, it is out there and can hit out of nowhere (and you only realize that that's what it was well after the fact).

good luck and happy passover!