Sold house 14 months ago, just spent the money within the last 4 months.

[cubanito72]

The house was legitamately sold 14 months ago so that transfer is not an issue, but the money was deposited in the checking account and just sat there. The money was spent in the last 4 months on new flooring, a trip to hawaii, and paying off a car. Will the trustee be interested in this since the house was actually sold 14 months ago? To me that was the asset that was transferred. Would the trustee consider the funds in the checking account an asset that was spent in the last 4 months???? I'm concerned about having to payback the funds that were used for the trip and other luxury items to the bankruptcy estate. How would this be treated and how does it differ if let's say the home was sold within the last 12 months?

[HHM]

Yes, it will be an issue, CASH is an asset like any other. You May spend cash so long as the spending is reasonable and necessary. Also, if you are in Florida, paying off the car was probably a mistake since the exemption is only $1,000.

Basically, you need to be able to testify with a straight face to these question...
"You had X amount of money in your account 4 months, what happened to it. "
"Oh, so you went to Hawaii, bought new flooring instead of paying creditors which you agreed to pay"

I certainly would not want to answer those questions with what you apparently did?

The sale of the house is a non-issue, it is the cash and your use of the cash that is the problem, the house could have been sold 2 years ago, or 2 months ago, you still have the same problem with the cash.

[btbeme]

I'm concerned about having to payback the funds that were used for the trip and other luxury items to the bankruptcy estate.

Your concern is justified.

The only cure for this is a big gap in time between your expenditures and your filing. Like, about 2 years or so.

Sorry, man. Unless you know of a very good atty who can unravel this for you, you are in a corner.

[sassiebaz]

Is this a serious question?

[btbeme]

Is this a serious question?

sassie, I sit in on 341 meetings every now and then. You would be shocked.

But that is why we are here on these forums, trying to help people before they make the mistake (and helping them recover after they make it).

[justbroke]

Would the trustee consider the funds in the checking account an asset that was spent in the last 4 months???? I'm concerned about having to payback the funds that were used for the trip and other luxury items to the bankruptcy estate.

As already pointed out, the sale of the home is not the issue. The issue is the cash and where it went. A Trustee is going to see the large amount of cash and wonder what you spent it on.

A problem with Florida, is the stingy exemption for cars ($1,000), but you could use part of your "unused" homestead exemption to the tune of $4,000 (and your $1,000 constitutional wildcard). However, you need to cover all your assets with your $5,000 wildcard. So, where did this new flooring get installed... in another property that you own? Is that your homestead property?

You may get lucky and the Trustee doesn't catch it, but most of them are very strict when it comes to assets in Florida. It's mostly because we have stingy exemptions, so the Trustees almost "know" that they can almost be certain to find something.

Why are you filing bankruptcy? What's your unsecured credit looking like?

[sassiebaz]

If you knew you were needing to file, or wanting to file BK, why in the world would you take a trip, get new flooring and pay off a car with money you should have been using to pay creditors? I just don't understand that logic. Or, why would BK even be in the forefront of your mind if you could do and did all of these things with the money? Why am I even responding to this question????

[mountanddo]

If you knew you were needing to file, or wanting to file BK, why in the world would you take a trip, get new flooring and pay off a car with money you should have been using to pay creditors? I just don't understand that logic. Or, why would BK even be in the forefront of your mind if you could do and did all of these things with the money? Why am I even responding to this question????

I can understand the new flooring if the old flooring needed replacing. Since the exemption for the car is only $1000 it might of been worth it to do a little research on that before you paid it off. Since you don't say how much you received as a result of the sale it's difficult to see the whole picture. There is a big difference between getting $5000 and $60,000. Spending $5000 on these things might not raise as big a red flag as if you spent $60,000. Maybe I'm wrong and any amount would raise a red flag. I wish I could of afforded to take a trip to Hawaii before I filed BK. I could use one!