Is this True?

[Yellowsnow]

I'm on the other side of the whole BK issue. Sorry.

An exfriend filed for Ch 7 to skip out on paying me back on a 7K loan. Note, this is a truly questionable action on her part. She is doing this as a condition to marrying a wealthy man. She will be quite well off financially after the wedding. She got some beautiful diamonds, etc. So this isn't quite the same as what most of you are going through.

I got the letter from the BK court saying she listed me as a creditor. Is it true that when I TRY to writeoff my loss on my taxes, it will be reported as income on hers? And she will owe taxes on the money she borrowed from me? Taxes she can't have discharged by bankruptcy?

[SMinGA]

No, its not true... Debts discharged in bankruptcy are not taxable as income.

Unfortunately for your situation, marrying someone in the future does not have a bearing on her financial standing now. Loaning money among friends is something that usually does not turn out well.

[Yellowsnow]

No, its not true... Debts discharged in bankruptcy are not taxable as income.

Unfortunately for your situation, marrying someone in the future does not have a bearing on her financial standing now. Loaning money among friends is something that usually does not turn out well.

You are so right.......

Believe me, I have been totally cured of the curse of generosity. The next time someone I know is 'desperate', all they will get from me is the suicide prevention hotline number.

Darn....I was so hoping this was true. She needs to feel my pain. She will be wealthy and able to replace everything she lost....plus. She took 7K of my retirement money that I can't replace. She comes out of this smelling like a rose...a rich rose. And I lose.

[keepinitreal]

She got some beautiful diamonds, etc.

Make sure she claims her beautiful diamonds as assets. The trustee may be able to sell them and use the money to partially or fully re-pay you and the other creditors.

[jcraneesq]

Engagement Ring is Not an Exempt Asset

An engagement ring is not an exempt asset, at least in NY. Check with an attorney near you.

[Yellowsnow]

These folks aren't dumb. I'm sure those assets all belong to him.....on paper.

She files for chapt 7 and then gets married a month later. Before the hearing even takes place and she flies free. On to her new life free of debt.

Bankruptcy exists because there is a real need but people like her make me wish there still was a debtor's prison.

[mrskal]

Could you fight it at all in court, even if you dont win, it sure would shake her up a little with the wedding only a month away and all. Just a thought, not sure if it would really do anything. LOL What nerve!

[Yellowsnow]

Could you fight it at all in court, even if you dont win, it sure would shake her up a little with the wedding only a month away and all. Just a thought, not sure if it would really do anything. LOL What nerve!

I don't think so because for me it would be throwing away more money. Plus she lives in another state as well. She's smart enough to have all her bases covered. She will walk away scot free and into her new luxurious life. Did I mention she also has her own job that pays 80K per year.

But I sure would have turned her in to the IRS because I know she never claimed my loan as income. I had high hopes for that one. Who knew the IRS would pass up a chance to get money? Amazing....I guess that's a loophole. If you have a load of income you haven't paid taxes on, file bankruptcy and the IRS can't touch you!

[NewDawn]

If she has a job that pays 80K per year, she is above the median, unless she has lots of children. So I don't see how she would qualify for a Chapter 7. Did she list 80K as income on her petition?

Did she list her diamonds as assets on Schedules B and C as well as other assets you know she has?

[NewDawn]

I would go to her scheduled 341 meeting and ask her those questions. You might also make the argument that she filed her petition in bad faith. She is specifically timing her bankruptcy filing in order to not disclose her immediate future income. On Schedules I and J, you are supposed to state whether there will be a change in your future income or expenses. If that isn't bad faith, I don't know what is. Tip both the trustee and U.S. trustee off of her bad faith. Again, I don't see how she could qualify for a Chapter 7 with an 80k a year job, unless she has lots of children, lives in a very expensive state or has a large mortgage.

Maybe you could hire an attorney in her area where she filed to go to the 341 meeting and ask her questions.

[keptdigging]

Her future husband's wealth doesn't affect her bk... but an 80K job sure does. Yeah, I'd exercise my rights to check out her petition and show up at the meeting. At least she'll feel a little of your pain.

I owe my mom a bunch of money. Legally it'll be discharged in bk. But I'll find a way to pay her back anyway. I'd never treat friends/family like American Express.

[justbroke]

If she has a job that pays 80K per year, she is above the median, unless she has lots of children. So I don't see how she would qualify for a Chapter 7. Did she list 80K as income on her petition?

All you need to do is... well... live in NYC and that alone will probably have enough expenses to justify it. Especially if you own property. I'm way way way way over the median and qualified, albeit under a non-consumer, but I could have as a consumer as well.

Did she list her diamonds as assets on Schedules B and C as well as other assets you know she has?

Unfortunately anything related to a wedding is not her property and specifically for NY, engagement rings are exempt.

[sah2]

I am in NY and my attorney told me not to wear any jewelery to my 341, including my wedding and engagement rings. He told me he had one particularly nasty trustee rip the engagement ring off a client and send it in for appraisal. Luckily I did not have that trustee. By the way, the median income here in NY is something like $82,000 for a family of 4. We just made it.

[justbroke]

I am in NY and my attorney told me not to wear any jewelery to my 341, including my wedding and engagement rings. He told me he had one particularly nasty trustee rip the engagement ring off a client and send it in for appraisal. Luckily I did not have that trustee. By the way, the median income here in NY is something like $82,000 for a family of 4. We just made it.

This depends if you're married. If you're married, the engagement ring is FAIR territory for the Trustee. However, if you're not married, the engagement ring is part of a contract and is... and I'm laughing writing this... a secured debt since you must actually complete the contract -- marry -- in order to keep it.

Wedding rings are covered under the Exemptions in New York. Other States don't cover wedding rings at all, so NY is nice.

I would never wear any "expensive" jewelry to the 341 Meeting anyhow, and no one should. It smells of vanity.

[sah2]

I don't have any, except for my wedding/engagement ring.