Since May 2010 Mother in law loaned us $4500, is this income/creditor?

[murphsmom]

I've read conflicting advice. My mother in law stepped in to help us make mortgage payments while my husband was out of work. She has stated that we "really do not have to pay her back", but we do intend to, once we are through this financial mess.


SO, I thought I read that a personal loan does not have to be included as income as long as we list our MIL as a creditor, and have not made any payments to her (we haven't). She will get a discharge notice like the rest of our creditors, which is fine.

She gave us $2000 in May 2010, another $2000 around Nov 2010 and $500 in Feb 2011. If we chose not to list her as a creditor, and instead included these as gifts (income), we'd just need to include the amount given to us within 6 months of filing, is that correct? Or would we include it all. I'd have to make sure this didn't mess with our means test. I'm pretty sure we will be listing her as a creditor, but want to know what our options are.

Personal loans from family members are NOT counted as income, as long as we list those family members as creditors and haven't made any paybacks to them, right?

[IHateToBeEmo]

Personal loans from family members are NOT counted as income, as long as we list those family members as creditors and haven't made any paybacks to them, right?

Yes I agree that your mother-in-law is an unsecured creditor and you would want to list her loans in your bankruptcy petition. They shouldn't be considered income.

[debee]

... we'd just need to include the amount given to us within 6 months of filing, is that correct?

The means test lookback is 6 months.

[frogger]

She loaned you money which makes her an unsecured creditor. A loan is not income, it is a loan. List her as a creditor and file against her.

Once you're discharged/closed, they you can do as you will.

[StartinOver]

It seems to me that since the money was given with no repayment strings attached, and no loan documents, that the OP should be free to do either. It's to OPs benefit for this to be seen as an unsecured loan, with regards to means test, though, isn't it? My sister gave me money, marked right on her checks as "gift." Our instructions from her were "pay it forward" someday when we're on the other side of this nightmare.

[debee]

It seems to me that since the money was given with no repayment strings attached, and no loan documents, that the OP should be free to do either.

This is how I see it as well. She should consider what's best for her case overall and play it that way.