Gift question

[jodie3134]

In May 2011... we borrowed 10k from my inlaws. I used all of it to pay the balance on a credit card so we could transfer other balances to that card and take advantage of a 0% offer. I don't know why I thought that would help my financial situation and make things easier, but I will say I was desperate and it sounded like a good idea at the time. We were told that we could pay it back whenever we had the extra money to do so. Quite honestly, they probably don't expect us to pay them back, but I will. Do I need to include this information in any of my bk filing? I didn't use it as income and did use it to pay bills. It was well over a year ago. Just wondering if I even need to mention this?

[AngelinaCat]

List it in your paperwork as a loan. And this makes your in-laws creditors, and they will be notified as part of the creditor matrix that I talked about in your other thread.

I am assuming hat you haven't paid any of this money back, and that is okay. Once you get your Discharge, even if this debt/loan/gift is discharged, you will be able to pay anyone of your creditors back that you wish.

What you DON'T want to do is to pay the in-laws something, and NOT pay any of your other creditors. If you do, that is a 'Preferential' payment, and the trustee can have it undone. Also, since the in-laws are 'family', then it becomes a 'Preferential Insider Payment', and again, the trustee can have it undone.

[jodie3134]

Sorry... I don't understand the last part. So you are saying after discharge... we shouldn't pay her anything because we would also have to pay other creditors. Or are you saying that prior to discharge, we shouldn't pay her anything.

[LadyInTheRed]

Sorry... I don't understand the last part. So you are saying after discharge... we shouldn't pay her anything because we would also have to pay other creditors. Or are you saying that prior to discharge, we shouldn't pay her anything.

Don't pay her anything before you file. If you did, the trustee can take the money back from her. The loan will be discharged in your bankruptcy, but you can still pay her later. There is no law against paying a discharged debt. The creditor just can't try to collect on it.

[tobee43]

if you do list your inlaws they can also use the money as a loss on their taxes...only 3k per year, but it can carry over for a few years. sometimes that's a bigger plus then the actual money.

[keepsmiling]

Don't feel bad about borrowing from Peter to pay Paul.
Virtually all of us have BTDT.
I assume you are comfortable sharing your financial situation with the family? If so you are fortunate. Many here are not able to do so.

[jodie3134]

Thank you! It makes sense now.

Very interesting on the tax loss. I'll have to look into that.

Actually... I am not at all comfortable sharing my situation with friends and family. I think I am going to have to tell my parents because of the honda that they cosigned (unless I can intercept their mail . I guess I'm OK telling my mother in law because she knew of our situation a year ago and wouldn't judge. I DO NOT want my sisters or friends to know. They all are pretty financially stable (or so I think) and I am embarrassed.

[tobee43]

Thank you! It makes sense now.

Very interesting on the tax loss. I'll have to look into that.

Actually... I am not at all comfortable sharing my situation with friends and family. I think I am going to have to tell my parents because of the honda that they cosigned (unless I can intercept their mail . I guess I'm OK telling my mother in law because she knew of our situation a year ago and wouldn't judge. I DO NOT want my sisters or friends to know. They all are pretty financially stable (or so I think) and I am embarrassed.

to this day, our son still doesn't know. not like we lied to him, the subject just never came up. when he asked us about our home of 30 plus years, i just said oh, we took a big hit on it, so i really didn't lie, and i made certain before we left it that i hit it a few times with a stick, LOL!

none of our friends knew either, we were able to avoid anything posted in the newspapers because we left the state and filed in our new state where no one knew us at all. it's not that we were ashamed of our situation, we just felt our business is just that OUR business and no one else. but don't be embarrassed, i know, easier said than done, the guilt and shame, at first one deals with. like we are personally responsible when we lost our jobs, or got our pay cuts, got ill, or the banks upped our interest rates so high that we could no longer meet the payments.

it will go well! just keep the faith!

[ValleYum]

Actually... I am not at all comfortable sharing my situation with friends and family. I think I am going to have to tell my parents because of the honda that they cosigned (unless I can intercept their mail . I guess I'm OK telling my mother in law because she knew of our situation a year ago and wouldn't judge. I DO NOT want my sisters or friends to know. They all are pretty financially stable (or so I think) and I am embarrassed.

You may be surprised. Really. I was amazed at how non-judgemental *everyone* has been including my 70+ year old parents. Maybe it is the tough economy making BK less of a big deal.

Welcome to the forum, jodie - your BK journey may be a wild ride but you are in great company here! Read and ask questions - we are here to help!

[ksgirl38]

to this day, our son still doesn't know. not like we lied to him, the subject just never came up. when he asked us about our home of 30 plus years, i just said oh, we took a big hit on it, so i really didn't lie, and i made certain before we left it that i hit it a few times with a stick, LOL!

none of our friends knew either, we were able to avoid anything posted in the newspapers because we left the state and filed in our new state where no one knew us at all. it's not that we were ashamed of our situation, we just felt our business is just that OUR business and no one else. but don't be embarrassed, i know, easier said than done, the guilt and shame, at first one deals with. like we are personally responsible when we lost our jobs, or got our pay cuts, got ill, or the banks upped our interest rates so high that we could no longer meet the payments.

it will go well! just keep the faith!

No one knows I filed either and I'm hoping to keep it that way. I figure it's really no one else's business anyway.