Sale of asset

[2sad4this]

I've been reading some threads about this and I have a question. I know every person who has have this come up has a different angle so I want to share my story and would appreciate your input.
Before we truly decided to file, but were talking about it, we had an old motor home. My husbands brother would stay in it while visiting (we have a 1 bedroom mobile home in the country). We ended up selling it to him for $100. It needs 6 new tires, either a repair to the generator or a new one, there is a hole in one of the holding tanks and the water pump is shot. We were concerned when we decided to file bk. We found that the nada book value is around $2000. Will the trustee flag this as fraud? Will they consider how much the repairs would be to fix the motor home? My husband figures the repairs would take most of value away, leaving a couple of hundred in value. Thank you for your help.

[AngelinaCatHub]

I've been reading some threads about this and I have a question. I know every person who has have this come up has a different angle so I want to share my story and would appreciate your input.
Before we truly decided to file, but were talking about it, we had an old motor home. My husbands brother would stay in it while visiting (we have a 1 bedroom mobile home in the country). We ended up selling it to him for $100. It needs 6 new tires, either a repair to the generator or a new one, there is a hole in one of the holding tanks and the water pump is shot. We were concerned when we decided to file bk. We found that the nada book value is around $2000. Will the trustee flag this as fraud? Will they consider how much the repairs would be to fix the motor home? My husband figures the repairs would take most of value away, leaving a couple of hundred in value. Thank you for your help.

You have no real problem. You gained no real wealth and it was not hiding an asset. We had a 67 chev impala and at our 341 were asked what we thought it was worth. Our answer was "we don't know, it is on blocks brakes are seized, and has not run for four years. It is green but the paint is blue. The green is mold." The Trustee said well a car could be just an old junk or a restored classic worth thousands. We told the Trustee that he could have it for the value of steel, and we would release it to him. He smiled and said that was not necessary and later abandoned the car. Once I regained my health, I put new brakes on it, changed the dead gas, and rebuilt the carb. It ran and cleaned up well. We got double of what we paid for it. This was not on purpose nor were we hiding anything as I was too sick to bother with it and would have had no problem giving it to the Trustee as it was not worth fixing to him.

Your camper has a minimum value in times like these. I would address this at your 341 or put a note to the effect of what you did, and why you did it and that you did not intend to file bk at that time. The Trustee is likely to ignore your actions when you address them before he actually finds this out on his own. Honesty is valued in this bk situation. Worse case condition is that the Trustee "could" go after the relative for all or part of it's value or ask you to purchase that value back. I really doubt it will happen though. It would not be worth the Trustees effort. In any case, it will not hold up your discharge. 'Hub

[btbeme]

Agree with Angelina. Be up front on this. Document what you can (photos, etc) and prepare to defend your sale at your 341 hearing. If you can answer the question "Why did you sell it for this price" and provide documentation if asked to do so, chances are that it will be no issue at all. Best case scenario is that you describe it as a "motorhome in need of repairs which was towed from the property, etc" in your filing paperwork and that will be all the explanation the Trustee will need.

That being said, if there are a number of other red flags in your filing...well, the whole filing has to pass the "smell" test, so make sure you document whatever you can dream that a Trustee will ask about. Our 4 inch binder at our 341 hearing likely indicated that we were prepared to back up anything the Trustee might question. We had no problems at all, even though our filing was significantly far from being a quick and easy case.

Bottom line - fraud means that you intended to deceive. Be able to show that you did what was right, reasonable, and honest in your best judgement.

[2sad4this]

Thank you for your input. We are gathering the info pertaining to what needs to be repaired or replaced to bring down the amount of value to coincide with what we were paid.

Now, where do we put this info on the worksheet, to "any and all transfers"?

[tcreegan]

Hey 2sad4this, just a thought, does this motor home have a title? If so, did you change the title to your brothers name? If you haven't gotten around to transfering the title yet, no need to bother about a transfer on the BK forms. But you do need to exempt its value then....

Oh well, just a thought....

Tom in Colo

[2sad4this]

Yes it had a title and my bro-in-law has already transferred it into his name.

I have been getting quotes on how much it would take to fix. 6 new tires for $1393, water pump for $178, and a used generator for $1000 (new was $3078).
The nada value on the rv was $2470, so as far as we can see we are okay. Thanks for your input!

[btbeme]

Good. Hold on to that info, make sure your filing has a brief explanation as to why it was sold for that price, and bring your info to the 341. You may be asked about it (we were asked "Did you receive monetary compensation for your property transfers? How much?") and had our paperwork ready to go...but Trustee just moved on.

May you have the same experience.

[2sad4this]

Thank you to all who have replied to my questions. This very helpful and I know I am prepared to answer to the trustee about this transfer now.

[tcreegan]

The nada value on the rv was $2470, so as far as we can see we are okay.

...and NADA is usually high. You can get lower values from KBB or comparing local sales ads

Tom in Colo