Selling an asset 4 months before filling

[helpme911]

I had sold a boat 4 months before filling, the proceeds went to pay child support and allimony. The trustee is having a problem with this. Whats are the laws? I thought you could not sell any asset 90 days before filling.

[Ihatebk]

If you can show that you paid child support with a reciept the trustee would find this as a priority claim and that was legit. If upi sold the boat amd used the money to pay another unsecured debt the trustee would say that you are placing one credior higher than another one an you would have bad problem at that point.

[frogger]

There is a standard 2 year lookback on asset sales, and can go back as far as 10 years.

[AngelinaCat]

Welcome to the forum helpme911. Unfortunately the standard look-back period is six months or 180 days. If a trustee suspects fraud, then they can look back for longer periods of time. If the boat was sold to a 'stranger' for its 'fair market value, then you should be okay. Please say that you have all of your receipts, and can explain where the money went.

If you sold the boat to a relative or friend, and/or it was sold below market value, it can be looked at as a 'fraudulent transfer' with the intent to hide an asset.

Good luck to you.

[helpme911]

Thank you for the replies
The boat was sold to a stranger, The money was wired to my acct that is used to pay the support. I do have all receipts since the payments are made to the court
I have a new meeting on May 20, I will bring all the documentation

[HHM]

What exactly do you mean by "trustee has a problem". They can have lot's of problems, but at the end of the day, there is nothing they can do about it. So long as the boat was sold for fair market (reasonable) value, and if the money went to pay back alimony and child support, there really is no issue. Those are priority debts (super priority really) so, there is not a whole lot the trustee can do.

[Brasky]

A trustee may avoid fraudulent transfers within two years from date of filing. Fraud doesn't require intent. If you did not recieve reasonably equivalent value for the sale of the asset, it will be considered constructive fraud, and the trustee may avoid the transfer.

Also, if you sell an asset, even for fmv, and cannot satisfactorly explain where the proceeds of the asset went, you may not recieve a discharge.

If I were the trustee and found out about this transfer and had no documentation regarding the transfer, I would check it out. It seems like a fairly reasonable course of action.

[AngelinaCat]

Brasky, the OP stated he has proper documentation. The money went to child support and alimony.

[tripbuddy]

Actually, OP Stated he has proof the money was wired into the account he pays child support out of. And has receipts for payments made out of that account. The question, then,might be what else is paid out of that account. Although I know nothing about all this, just wanted to point out that detail.
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[scorpion35]

Actually, OP Stated he has proof the money was wired into the account he pays child support out of. And has receipts for payments made out of that account. The question, then,might be what else is paid out of that account. Although I know nothing about all this, just wanted to point out that detail.
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the trustee is going to ask for bank statements for that account i bet to see where the money is going

[btbeme]

I would supply cancelled checks for the child support payments, two or three legitimate value estimates for the boat, the bill of sale (and a copy of the advertised price), all bank account statements for the time period, and anything else I thought would help explain the sale of the boat and where the money went. Bring it all with you. If asked to provide info, hand it over with a short explanation.

Any reasonable Trustee will want all of that documentation to help them make a decision on whether you were justified in doing what you did (hope so); or were ignorant of "fraud" (hope not); or, God help you, are trying to "play cute" and hide assets or cash. The first scenario is A-OK, the second is probably OK (with a frown from the Trustee). The third is not something you would wish on a Nazi.

HHM is likely correct - the "problem" a Trustee likely has in a scenario like this is the lack of a proper explanation and paper trail. Provide both and the Trustee will make an educated decision, likely without pain.