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    #1

    Gifts before filing 7

    We are planning on filing for Chapter 7 next month here in California. We are above the median but pass the means test. My brother in law just came into some cash and sent us a gift of 5k. Is this going to be considered as income and mess up our ability to do chapter 7? I have a call into our lawyer but I wanted to see if anyone else had experienced this.
    Thanks.
    Tags: gifts
    #2
    Originally posted by Greysky View Post
    We are planning on filing for Chapter 7 next month here in California. We are above the median but pass the means test. My brother in law just came into some cash and sent us a gift of 5k. Is this going to be considered as income and mess up our ability to do chapter 7? I have a call into our lawyer but I wanted to see if anyone else had experienced this.
    Thanks.
    I am pretty sure it won't be considered income. Hopefully, you haven't used all of California's generous wildcard exemption and can exempt it as an asset.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment

      #3
      Unless this gift is "regular", it is not income for purposes of the Means Test. If you use it to pay for your attorney, but some food, see the doctor, repair your car/home, purchase clothing, and other necessities, I don't see any issue. If you have leftover money, make sure you exempt it.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment

        #4
        Just a quick response. We gave the gift back to my brother in law. My wife told him what was happening which was really hard for her since he has always been very frugal and good with his money. He was very supportive and offered to take care of our legal fees to get us through this. He also agreed that its the right thing to do given our situation. He's truly a great guy.

        Comment

          #5
          I'm glad to hear your BIL is supportive.

          I'm curious why you decided to give the gift back. Did your lawyer recommend it? If so, what was his reasoning?
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment

            #6
            Sorry Lady,
            A little late in responding. Our Lawyer recommended it. We are so close with he means test he didn't want to raise any flags. Her family gifts her pretty consistently.

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