Schedule G Question

[cz3ch]

I filed a chapter 7 originally which is now converting to a chapter 13 due to a change in my expenses. I have my first 341 meeting on 12/6 in case it doesn't convert before that. I had a question regarding Schedule G.

Back in February I got a job in another state and ended up letting my friend take over payments on my car until she could afford to buy it outright and assume the title. I disclosed this to my bk attorney and she listed the money I received each month as "contribution from friend" and said if the trustee asks just let him know your friend is driving your car.

We drew up basic terms that she would pay me each month but neither one of us can find a copy of this.

My question is should this be listed as a contract or lease under Schedule G? And if so, is it something my lawyer can amend to make sure we are on the right path?

I emailed my lawyer about it but she said, "we can discuss this when we meet after your case converts". I'm a bit nervous on how to handle this if questioned about the situation in a Chapter 7 341 meeting. I assume my lawyer will prime me on how to answer but would like some feedback on how to handle this.

[HHM]

No, it is not an excretory contract for schedule G.

This is NOT a big deal, so don't waste this much energy.

It is basically income with an off-setting expense.

Even most bankruptcy attorneys would have a hard time explaining an executory contract. Leases are the main example. The idea is that if the debtor (or other party) were to suddenly stop doing what they are supposed to do under the agreement, would that act be a breach of the agreement. But even that definition is not super great. Theoretically, you could go get your car back and that would be a breach, but that is not really what executory contract has in mind. The idea is more of, if you "stopped" doing something, not if you went out and did something to breach it. All you do is collect payments the other person has the car. There is nothing for you to "stop" doing that would constitute a breach.

[cz3ch]

Thanks for the feedback HHM.

I was more concerned that we couldn't find the agreement and might have to list it as a lease/executory contract.

Seeing as she pays me money to satisfy the note and gets to drive the car I guess I'll leave it as income with an offset expense as my lawyer has it listed.

If the trustee asks me if I've sold or transferred property I assume I would answer no? Since I still maintain possession of the car and the title is still in my name (with the finance company holding the title)?

Thanks in advance.

[HHM]

Let's clarify, in your first post, you said the friend had the car. Now you're saying you are in possession of the car? Which is it?

"Assuming" the friend has possession of the car (e.g. meaning the friend is the "primary" user) You have "transferred" property (at least in a physical sense) and have transferred "equitable" title to the vehicle (equitable title is the "use and enjoyment" of the item). So, if the trustee asks "have you sold or transferred any property, the answer is yes. Also, that question is asked in your Statement of Financial Affairs, so the answer is yes, and you simply provide an explanation.

There is nothing wrong with the situation per se, you haven't committed any fraud.

[cz3ch]

Let's clarify, in your first post, you said the friend had the car. Now you're saying you are in possession of the car? Which is it?

"Assuming" the friend has possession of the car (e.g. meaning the friend is the "primary" user) You have "transferred" property (at least in a physical sense) and have transferred "equitable" title to the vehicle (equitable title is the "use and enjoyment" of the item). So, if the trustee asks "have you sold or transferred any property, the answer is yes. Also, that question is asked in your Statement of Financial Affairs, so the answer is yes, and you simply provide an explanation.

There is nothing wrong with the situation per se, you haven't committed any fraud.

Thanks for the response. What I meant by possession is that it's still titled/financed in my name but yes she is the primary user of the vehicle at this time.

So I assume I need to amend my SOFA to reflect a yes answer to the question? I'll discuss this with my lawyer when we meet next.

The car is listed with its equity as exempt (2500.00) since its financed through a lender. I'm also reaffirming/retaining the car and the debt.

Do you see any obstacles in keeping the car given the arrangement? And by keeping I mean reaffirming/retaining the car and debt.

Thanks for all your help.