Do I list unused airline tickets and pre-paid rent as assets?

[sailing2013]

Long time reader, first time poster. Excellent forum.

Two quick questions:

1) I have $1200 in pre-paid rent and $2000 in unused airline tickets. Do I report these as assets?

2) What are the chances a creditor objects to these purchases, even if they were made six months prior to filing?

In short, I live in Australia; and will be returning stateside to file. The pre-paid rent is a room I have booked for a month through AirBNB, for when I'm in town to file. And the airline tickets are my return from the US to Australia, post-filing, and several flights once I'm back in the US.

Thanks for your help!
Steve

[HHM]

Hard to say, but if if you charged $2,000 on a credit card, made no payments on that card, and then filed Bk within 6 months; a creditor would probably object. But you are asking us to speculate on internal creditor policies.

If you made a few payments, you might be okay.

The rent is probably okay...unless you charged both the rent and airline tickets on the same card.

Understand, the worst case scenario is that you would still owe that particular debt. And even then, you can probably settle any BK dispute for about half anyway.

[sailing2013]

I appreciate your quick reply.

1) What about listing the prepaid rent and airline tickets as assets? Are they included on the asset disclosure?

And how about gift cards? I have gift cards totaling around $2K.

2) All of the transactions will have been completed more than six months before I file--sorry if I wasn't clear. And I will continue to make payments until just before I file.

Thanks,
Steve

[HHM]

How did you come to possess $2k in gift cards?

[sailing2013]

I purchased them.

[frogger]

Everything that you have mentioned has monetary value and is therefore an asset that should be listed.

[despritfreya]

Unused plan ticket is an asset
Pre paid rent is an asset
Gift cards are assets

All get listed.

I assume you have been out of the US for more than 2 years. If correct you will be using Federal exemptions and can utilize the wild card to try to shield these assets.

As HHM suggested, one cannot "guess" at what a creditor will do. All one can say is that they are given a window of opportunity to object and if they timely do object you will have to deal with it. However, if you are moving back to Australia and never plan to come back to the US again, I'm not sure it matters. For that matter, if you no longer live in the US what is prompting you to return to file?

Just out of curiosity. . . are you planning on living in the US (in one particular state) for 91 days prior to filing or do you have your principal asset located in some state that will allow you to file in that state without waiting 91 days, or have you found away around this issue. I have never dealt with someone returning to the US to file so I am curious.

Des.

[sailing2013]

Thanks, Des, for your reply. I genuinely appreciate your help.

1) I have not lived in the US for six years; although I visit every-other-year for about ten weeks. While I do not have any physical assets like a car or house, I do maintain my CA driver's license, vote in CA elections, receive mail at a mate's house in California, and have his address listed on my banking and credit card accounts. Accordingly, I should be okay regarding the 91-day location requirement. Moreover, I do not have a residence visa for Australia--in the legal sense, I am still an American resident; and a Californian at that.

2) Regarding why am I compelled to file, there's two parts to that answer:

a) Currently, I am just exploring my option to file; I am not behind on any of my bills, though my situation is becoming precarious.

Assets, all in cash and stocks: $20K
Unsecured credit card debt: $50K

When I return to the States in six months, if my financial situation doesn't improve (namely, finding work, since I am currently unemployed), then my assets would be $8K ($8K = $20K current assets - $4K monthly payments - $8K expenses [6X$1250 per month]), with my debt largely the same.

b) Regarding why I am compelled to file in lieu of just letting my debt languish, I'm debating this as well.

i) For staters, it seems more honorable to file bankruptcy than to just be negligent; in a left-handed way, filing seems more responsible.

ii) Second, while living back in the US isn't on my current horizon, I'd rather not close off the possibility; at least by filing, the "ten year clock" will start ticking, and I can start re-establishing my credit.

iii) Finally, if I do return, it would seem easier to try to rent an apartment, for example, with my debts dismissed via bankruptcy rather than by having $50K in delinquent debts. And if I file when I move back stateside, say in four years, then my bankruptcy will be on my file four years longer than if I file this summer.

As I had mentioned, currently I am just in an exploratory phase. Filing is not something I had been considering, but, when I recently ran the numbers and realized I will be stateside long enough this summer to file, it seems prudent to fully examine this possibility.

Of course, all advice and opinions are greatly appreciated.

Thanks,
Steve

[HHM]

It is becoming pretty clear that you are taking steps to try to conceal cash, or use cash you had in a way for your benefit and keep it out of the reach of creditors and/or the BK trustee, so that is problem beyond whether these items are assets. As you suspect, which is why you probably chose these tactics is that items like gift cards and unused airline tickets rarely have redeemable cash value. The pre-paid rent is a little different, the trustee can simply contact the landlord and have the landlord turnover the unearned rent.

The gift cards could be a problem in more ways the ones. It is fairly obvious attempt to shield cash. So even though the gift cards and airline tickets may not have cash value, the bankruptcy court, if they think you acted in bad faith, will require you to pay the value of those assets into the BK estate. So, you might in fact face a double whammy in BK, the BK court will require you to pay the trustee the value of those assets and the creditors may object and you will be required to pay them back the money they lent for those items. Note, the double whammy is worst case scenario, and if (or I should say, WHEN) you hire an attorney, some of these issues can be navigated successfully.

About the only suggestion would be (1) inquire if you can redeem the airline tickets for cash, (2) use the gift cards in a responsible way, e.g. living expenses prior to filing BK.

[sailing2013]

Thanks, HHM, but I reckon I have given you the wrong impression. I haven't even decided if I am going to file BK, let alone "conceal cash." Perhaps while you were writing your reply, I was also writing my last post, since I cover my situation more completely in that post.

The unused plane tickets are for my return to Australia after I visit the States this summer (SF to Sydney), and a couple of stateside flights to visit relatives (SF to Cincinnati, Cincinnati to Dallas, Dallas to SF). These tickets have been purchased using credit, not cash.

The prepaid rent was also paid via credit, through AirBNB. Since I'll be in SF for a month, I've secured a room for the duration of my stay.

These are, frankly, ordinary, everyday expenses.

[ksgirl38]

Thanks, HHM, but I reckon I have given you the wrong impression. I haven't even decided if I am going to file BK, let alone "conceal cash." Perhaps while you were writing your reply, I was also writing my last post, since I cover my situation more completely in that post.

The unused plane tickets are for my return to Australia after I visit the States this summer (SF to Sydney), and a couple of stateside flights to visit relatives (SF to Cincinnati, Cincinnati to Dallas, Dallas to SF). These tickets have been purchased using credit, not cash.

The prepaid rent was also paid via credit, through AirBNB. Since I'll be in SF for a month, I've secured a room for the duration of my stay.

These are, frankly, ordinary, everyday expenses.

Forgive me, I haven't read the entire thread, but I was told by my attorney that an airline ticket is considered an asset and I was just asking about a $300 one from the Midwest to California so I think a $2000 one would be even more of a red flag. Is it a non-refundable ticket? Although since you purchased it on credit it's more likely the trustee will take it. Especially a $2000 one. If it were me, I'd wait to file until after I used that. Not sure how the rent would be handled, sounds fine to me. You do realize you need to be living where ever you plan to file for at least 90 days, right?

[HHM]

Fair enough, but that still doesn't explain the gift cards?

But you are correct, we posted at about the same time, so I did not see your response.

I sort of suspected that was the case with the airline tickets. But, at least with my post, you can get a flavor of how the BK trustee and an objecting creditor may present what you think are innocent acts into not so innocent looking acts.

[frogger]

you can get a flavor of how the BK trustee and an objecting creditor may present what you think are innocent acts into not so innocent looking acts.

It's looking like a duck, walking like a duck, and quacking like a duck...........

[ValleYum]

It's looking like a duck, walking like a duck, and quacking like a duck...........

It's a duckbill platypus?!?!?

[philslyn]

Hmm tricky.. that's considered as an assets, prior to filing you are suppose to declare any assets, that should been declared, and can be exempted provided you haven't not pass the amount on the exemption.

if it's not purchased through credit, it could be exempt.

One scenario i remember, debtor purchased a laptop from best buy, although it was listed on the bk, creditor wanted the laptop back, debtor simply said it's gone since it was gifted to somebody. and debtor claimed it's no longer in their possesion,. creditor let it go, and couldn't do nothing about it. I think because they couldn't trace it.