Borrowing money from relatives to lawyer fees to file?

[chmastal]

Hi,

I currently owe my parents $1200 (money borrowed to help pay expenses the last two months), paying the CC bills has set me more behind along with the bounced checks & late fees. I stopped last month & at this point I am not yet 30 days past due in other words no hounding calls yet.
Anyway, the retainer fee for the lawyer is $300 (just to open the file & have creditors referred to the firm).

My question is: I have to borrow this again from my parents. I've gotten myself behind so far because I was paying the bills with borrowed money. I currently don't have the $300 to put down myself. Then of course the rest of the lawyer fees & costs are required in order to have the paperwork prepared for the BKR filing, which again I will most likely borrow from my parents.

What do people using do when filing BKR to come up with the money for the lawyer?

Your asked if you got a loan shortly before filing. Your asked if you sold anything major.

I was given terms of payment for the lawyer over 6 months which I'm not so sure I'll be even able to pay the payment on my own after my normal living expenses.

I would prefer to borrow the total cost from my parents in order to get the ball rolling, but does that look fishy, when it's not.

My parents will allow me to repay them in smaller increments (which I've already told my father I can't pay him back anything till after the BKR is discharged, that what the lawyer told me to do in order to account for all monies).

My last question is: Since I have to pay this back to my parents to I include the additional monies borrowed in what I already owe my parents as debt owed? My parents already know I will pay them back once I get my life back on track.

I hope these questions don't sound stupid, but just going thru the initial consult there was alot to take in & my mind emotionally wasn't working fast enough to think about these things. Now that I want to sleep (yes it's the middle of the night) I'm thinking of it all.

[miss puff]

I haven't borrowed money from a family member, but from what I have read and as I understand it, you can borrow the money. You would have to list your parents as a creditor and their monies that they borrowed to you would technically be discharged in your BK. There is absolutely NO stipulation that says you cannot pay them back after your BK is discharged. You can even start paying them back right away, just don't make a larger than $200 per month until discharge otherwise it would be considered a preferential payment.

Again, I am not well educated on this subject. And this is the way I "believe" it to be. Someone with more expertise might know more or correct something if I have it wrong.

Good luck

[anonymuse]

Loans to friends and family members are indeed discharged in a BK. However, no one is keeping you from paying them back post-BK discharge. In a Ch 7, that's easy since you'll be discharged relatively quickly. However, in a CH 13, you would not be able to pay them back until after your plan is complete since all of your disposable income would have to go to the plan.

[razorguns]

I haven't borrowed money from a family member, but from what I have read and as I understand it, you can borrow the money. You would have to list your parents as a creditor and their monies that they borrowed to you would technically be discharged in your BK. There is absolutely NO stipulation that says you cannot pay them back after your BK is discharged. You can even start paying them back right away, just don't make a larger than $200 per month until discharge otherwise it would be considered a preferential payment.

Again, I am not well educated on this subject. And this is the way I "believe" it to be. Someone with more expertise might know more or correct something if I have it wrong.

Good luck

you can't accept loans 60 days before filing. Othewrise it's considered fraud if you borrow and immediately file for bk.

They should just 'give' you the money. If u wish to pay them after bk - keep it to yourself.

r

[alh]

Well, not exactly fraud, the creditor would have to object, (in this case a family member) and the it would most likely only mean that that particular debt cannot be discharged. More likely to cause issues were if you paid them back the family members (pre BK) instead of someone else. That would be preferential treatment and would result in the trustee wanting the money you paid to the family member back.

I agree that if it just an informal gift/loan (no paperwork) then it is much easier.

[anonymuse]

I'm lucking out being able to save up. I have my gas & electric on monthly averaging and it's the "catch up" months. Since I've been paying too much, I'm only paying $50 a month for 3 months. I put the student loans in forebearance (sp?). I'm doing minimal groceries and pretty much eating that stuff in the back of the pantry that I always avoid. Sticking to milk, oj, and bread at the market and mooching off the parents a lot of dinners. If a trustee were to look at groceries for the last two months I've probably only spent $125.

[razorguns]

Well, not exactly fraud, the creditor would have to object, (in this case a family member) and the it would most likely only mean that that particular debt cannot be discharged. More likely to cause issues were if you paid them back the family members (pre BK) instead of someone else. That would be preferential treatment and would result in the trustee wanting the money you paid to the family member back.

I agree that if it just an informal gift/loan (no paperwork) then it is much easier.

you'd have to speak under oath. Plus the lawyer has to ESNURE there was no credit obtained within the past 60 days. Otherwise automatic dismissal.

No lawyer would even file that app until 60 days have passed. It's no different then using your cc to pay for the bk fees.

r

[SinkingFast]

Have the family members pay the attny directly themselves.

The money does not wash thru your hands or your bank acct.

Also have the family members write a "Gift Letter" stating the money has been GIVEN freely with no expectations to repaid.

Then you have a CYA.

[alh]

Otherwise automatic dismissal.

Do you have a reference that states that it is an "automatic dismissal"

[razorguns]

Do you have a reference that states that it is an "automatic dismissal"

if it's over $1075, or a cash advance - consider a major stoppage by the trustee and grilling. At best, it won't be dischargable - worst it could be dismissed.

This is to prevent someone going "hey i'm going to file bk tomorrow - so let me get a cash advance of $2000 to pay my bk! i'm so smart!"

you'll be under oath, so you'll have to disclose that personal loan. And since so many are scared of the 341 - why create the added stress? You might even po the trustee who'll put you in his radar and ask even more questions.

Best the family just 'give' the money. You can 'pay' them later. wink wink.

r

[miss puff]

Best the family just 'give' the money. You can 'pay' them later. wink wink.

r

My thoughts exactly!!!

[chmastal]

Thanks.....

Thanks for all the answers, after speaking with my father (I think he did some homework himself) he will pay the lawyer directly. This then avoids all hassels with the trustee. I believe this the easiest route to go. You folks are wonderful, I'm glad I found this board! He is going to pay the initial retainer fee to the lawyer & then I can get more legal advise as to what to do next.