BP Claim Check

[justbeach03]

So excited that I just got a HEFTY $30,000 check from BP and need help figuring out what I can and cant do with it?? Live in FL (non consumer-business closed) and had just sold my car to use the $14K funds to live with till May 2011, when I planned on filing. Attorney said I can't put any money in IRA, cause I haven't in the past few years and that's fraud. Said to spend it down on reasonable necessary living expenses.

Can't use it on house note, cause it's in my husband and his brother and that would be insider gift. Can't use on a car, that would give me equity. Looks it might take another year to spend it down. What happens to me with the creditors who are suing me now? There's no debtors prison. I've NEVER had this much money and now that I do, I don't know what how to keep it. i'd like to hold on to as much as possible...since I can't seem to find a job and dont' qualify for Unemployment. Attorney thought he heard that Congress may make these BP claim monies exempt in BK. Anyone else hear that or have feed back?

[drowning123]

Send me some. Lol.

[scorpion35]

So excited that I just got a HEFTY $30,000 check from BP and need help figuring out what I can and cant do with it?? Live in FL (non consumer-business closed) and had just sold my car to use the $14K funds to live with till May 2011, when I planned on filing. Attorney said I can't put any money in IRA, cause I haven't in the past few years and that's fraud. Said to spend it down on reasonable necessary living expenses.

Can't use it on house note, cause it's in my husband and his brother and that would be insider gift. Can't use on a car, that would give me equity. Looks it might take another year to spend it down. What happens to me with the creditors who are suing me now? There's no debtors prison. I've NEVER had this much money and now that I do, I don't know what how to keep it. i'd like to hold on to as much as possible...since I can't seem to find a job and dont' qualify for Unemployment. Attorney thought he heard that Congress may make these BP claim monies exempt in BK. Anyone else hear that or have feed back?

it might be exempt in bk but it will probaly count as income

[justbeach03]

drowning 123- would love too, but you know that's a little over the "allowable gift" range. ;)

[justbroke]

Unless and until Congress passes a law amending Title 11, it's both income and an asset. I wouldn't wait for anything from "this" Congress at all. You should probably shop attorneys. It's usually okay to convert non-exempt assets to exempt assets, but you need an Asset Protection attorney who understands how to do it correctly.

[justbeach03]

justbroke- thanks for the info. I don't expect ANYTHING from this Congress. I've read on here that it was ok to pay into an IRA as long as it was beyond the 90 day lookback. Trustees wouldn't be happy about it, but they couldn't do much either. Wasn't in my distric though. I was planning on contributing 5,000 for 2010 and another for 2011, but attorney is very concervative and doesn't want the case thrown out.

[justbroke]

You can go read In Re Potter which is a Florida Middle District Case in which the debtors, actually hindered and delayed creditors by taking a $300K tax refund and buying a home in Florida. The Trustee tried to avoid the transaction, but the Judge stated that the Florida Constitution preempts, not the Federal Statute (Title 11). The Trustee lost. The debtors kept the house and the $300K they put into it to keep it away from creditors.

So, I'd get a really good asset protection and bankruptcy attorney who can help you.

[tcreegan]

Hi justbeach03,

Here are some places Florida allows you some exempt places to put $$....

Prepaid hurricane savings accounts, prepaid medical savings account deposits, and prepaid college education trust deposits, pre-need funeral contract deposits.

I second justbrokes advice: get a good attorney before doing anything.

Tom in Colo

[justbeach03]

thanks so much for the info. Will check into it and let you know.

[AngelinaCatHub]

Hi justbeach03,

Here are some places Florida allows you some exempt places to put $$....

Prepaid hurricane savings accounts, prepaid medical savings account deposits, and prepaid college education trust deposits, pre-need funeral contract deposits.

I second justbrokes advice: get a good attorney before doing anything.

Tom in Colo

EXACTLY and I was going to mention the HSA but didn't realize the others as well. Thanks TCR.

Now, a question, they didn't JUST give you that money. What was your financial loss to deserve it? How long ago did you contemplate bk? Questions reasonably asked at a 341.

If it offset losses, that is exempt is it not? I believe it would be if you can prove this. If you profited, to hold off some of the suits, make some minimum payments to your creditors. IF they were to find out about your 30K, and get a Judgment, they might just jump upon you. Or worse, file an AP against you.

Also, stockpile at today's prices things barterable, usable and exempt. Food stuffs, soap, paper products (toilet paper), ammunition (for barter and your own use once the depression gets full swing). There are various ways but understand, I personally and this forum officially does not condone hiding of assets or anything that could look fraudulent. You have some money, take care of yourself first, but you DO owe those creditors and you DO have the ability to pay some of what you owe, just to hold them off if nothing more. 'Hub

[justbeach03]

Now, a question, they didn't JUST give you that money. What was your financial loss to deserve it? How long ago did you contemplate bk? Questions reasonably asked at a 341.

If it offset losses, that is exempt is it not? I believe it would be if you can prove this. If you profited, to hold off some of the suits, make some minimum payments to your creditors. IF they were to find out about your 30K, and get a Judgment, they might just jump upon you. Or worse, file an AP against you. ''Hub

Hub- Interesting! I got the BP for loss of income due to the spill. Between the combined past few years- oil spill, internal theft of 40K and the recession I closed 1 biz in June and the sold the assets of the second biz to pay some loans due to the debts of the first biz.

I starting thinking about BK in May. I couldn't handle the stress of the past few years and with no end in sight to the oil at that time- I threw in the towel. The money is personal income I should've recieved, but didn't because of the biz closing. I didn't feel right filing a biz claim on BP for the biz closing, as it wasn't going to bring them back and was a paperwork nightmare, after an already huge nightmare.

Now what do you think? Can someone explain why I can put money in a college trust, prepaid hurricane account etc...but not an IRA? Is the college trust like a 529 plan? Thought that would be considered an insider gift.

This may also be out in left field, but I need to figure out what to do when this money does run out and jobs here are scarce. Can use some money to start a new llc or s-corp prior to BK? No assets just an internet travel marketing biz, so I am set up for post BK.
Thanks for all ur help

[justbeach03]

It's been 3 months and 2 judgements since my last post. I am still unemployed and the BP money is being used to support my family until tourist season returns and husband starts making money again. Can creditors garnish bank accounts and swoop in to take the money or can they only garnish paychecks?

[addisonsmom]

They can garnish from your bank account. Best to keep cash.