Tax Refund. Please help.

[Jgoodall08]

I am In the process of gathering a million papers an atty
Wants to evaluate my situation and make a recommendation.
I'm assuming he will suggest a Chp 7. I'm married filing
Solely. My tax refund ($8000) will be In my account next week
Before filing or retaining the lawyer. I owe my grandmother
2k and want to pay her asap. I know you aren't supposed to give
Any family members and money for 6 months or a year before
Filing but can I pay her the 2k out of my husbands half of the refund
Since he isn't filing bankruptcy? Thanks guys

[AngelinaCat]

Even though you will be filing alone, you still have to declare your husband's income as part of your household financial picture. I do not believe you will be allowed to split the refund like that. You can make a small payment of $500.00 to your grandmother, with the understanding that you will repay the rest at a later date--meaning after you are discharged. Certainly make no payment over $600 within the period of one year, or you will attract the trustee's attention.

At the same time you pay grandmother $500, you need to make payments to your other creditors as well, so it doesn't look like you are making preferences.

[Jgoodall08]

Thanks for taking the time to reply.
I am current on all payments so I guess I'm covered
In the aspect of preferential payment.
But you think 500$ is safe?

[AngelinaCat]

The trigger appears to be $600 or more within the period of a year. One poster paid $500 twice to help her mother with the mother's medical expenses. The two payments occurred several months apart, but still within the space of twelve months, and so her trustee ruled these as 'preferential insider' payments, and the poster had to pay $1000 to the trustee, or he would have gone after her mother for the money.

So whether $500 is 'safe' or not will depend on your local district, and how particular your trustee turns out to be.

[tcreegan]

Hi Jgoodall08,

In CT I think you have the option of using state or federal BK exemptions. Depending on the equity in your home, under federal BK exemptions you can use a "wildcard" to exempt the cash. Then after the BK pay Grandma.

Definitely something to discuss w/ the attorney during the consultation!

Tom in Colo

[Jgoodall08]

I might be wrong but I think the wildcard
Is only like 1000$
I can't wait to talk to the atty but I'm I'n
the process of gathering all the paperwork he wants.
Wow is all I can say

[21bwife]

i would be very careful like others have said. I got lucky. I paid my dad a large amount of money within a year of filing. Around 2000 to 3000 straight out of my bank account. There was no hiding it. The trustee never said a single thing to me about it but my attorney thought for sure they would go after my dad for the money.

I really think it just depends on the trustee!

[BKParalegal]

The fed wildcard exemption is $10,125 per person. Don't pay nana a dime until after your BK is done just easier that way. Also, typically the trustee doesn't touch non exempt assets less than about $4000 unless it is a real simple case, then they may go lower, otherwise it is not worth nor is it ethical for them to take funds that after their expenses don't benefit the creditors.

Good luck

[helpmeout]

I had paid back the $600 I borrowed from my cousin within a year of filing. At the time I borrowed the money and paid it back, I had no plans or intention of filing. Since it was under $600, the Trustee didn't go after it. I didn't make equal payments to other creditors.

[BKParalegal]

Exactly, a trustee wouldn't even sneeze on $600. Not worth wasting the mucus ( that was kinda gross sorry)

[Jgoodall08]

Thanks for all the help everyone