cash question.

[lrprn]

First let me say thanks for your great contributions to the forum. I'm sure it's appreciated by many including me.

Thanks - very nice of you to say! (blush!)

Just want to confirm I’m getting sound advice from my attorney.

The point is you don't want to hide any large financial transactions when you file that are within their time limits set by law. Only each filer's lawyer can say whether any of the $5K uses mentioned is going to trigger their trustee into action or not.

From what's posted here in the forums and what I've read online, trustees willl act if they believe they have a good chance of either seizing an asset and coverting it to more than $1K in cash or forcing the filer to pay the difference to keep it, or if they can use an ill-advised purchase or money transfer to an insider to show the filer is cheating the bk system or is hiding assets illegally.

Once the fraud ball starts rolling, it's hard to stop and can cost a pretty penny beyond the normal lawyer fee. Not allowing the ball to start downhill in the first place is a far better option.

[lrprn]

Is there anything in the BK code that says this is illegal ?

Here's what the current code states about fraud - http://www.law.cornell.edu/uscode/ht...2----000-.html

Here's where you can get into trouble doing what you suggest - (1) The debtor made the representations; (2) at the time he knew they were false; (3) he made them with the intention and purpose of deceiving the creditor; (4) the creditor relied on such representations; and (5) the creditor sustained the alleged loss and damage as the proximate result of the representations having been made.

Buying a very expensive flat-screen TV and putting it on credit within 90 days of filing opens you up to the creditor's question, "Did you know you when you made the that you were going to file bankruptcy and not pay for the TV?" You can say no, but if the creditor decides to pursue it and asks your lawyer when you first went to him/her to discuss bankruptcy and it was months before the purchase, then that weakens your case.

Not saying you can't get away with it - you probably can. Just saying the possibility exists for an angry creditor to make a good case to the court for at least that debt to not be discharged. Whether you want to take the chance or not is up to you.

[ssdsco]

Here's what the current code states about fraud - http://www.law.cornell.edu/uscode/ht...2----000-.html

Here's where you can get into trouble doing what you suggest - (1) The debtor made the representations; (2) at the time he knew they were false; (3) he made them with the intention and purpose of deceiving the creditor; (4) the creditor relied on such representations; and (5) the creditor sustained the alleged loss and damage as the proximate result of the representations having been made.

Buying a very expensive flat-screen TV and putting it on credit within 90 days of filing opens you up to the creditor's question, "Did you know you when you made the that you were going to file bankruptcy and not pay for the TV?" You can say no, but if the creditor decides to pursue it and asks your lawyer when you first went to him/her to discuss bankruptcy and it was months before the purchase, then that weakens your case.

Not saying you can't get away with it - you probably can. Just saying the possibility exists for an angry creditor to make a good case to the court for at least that debt to not be discharged. Whether you want to take the chance or not is up to you.

Thanks. I read the code and it doesn't look like it's fraud if shortly before you file you buy a flat screen TV with non-exempt cash, not credit and list it in your BK inventory.

[Catia]

I really do like the prepaid gift card idea. Works the same as cash on hand at that store. Prepaid gas cards are a consideration as well. Your amounts are small, even if you bought 10 $50 gift cards in the same transaction, you are under the magic amount right? It would seem that was acceptable. I really am curious about this. I really wanna know where the dividing lines are for stuff like this.

lrprn--yes, you are exactly right, that case I referred to was about a preferential transfer to an insider. I've been so consummed with this lately. But wouldn't (technically) a purchase for yourself or the benefit of your spouse/family/business be considered 'insider', say for instance "gift cards" for family expenses. That's why I was considering it as such. And pre-payment of utilities just 'preferential transfer" (but no matter cuz if it's under a certain amount it won't be avoided). How's your knowledge of pref trans to insider? I have a few specific questions I need answers for.

We have such a great wealth of knowledge here, but it is so spread out, it is really hard to find. I would LOVE to see some flat out lists "stickied" for what you can/can't do. Some lists for things to consider pre-bk that are legal not fraudulent (proper conversion of non-exempt to exempt assets, dollar amount limits, time limits etc). Doesn't feel so disempowering if you find you can exercise some control ahead of time.

[Cali]

I really do like the prepaid gift card idea. Works the same as cash on hand at that store. Prepaid gas cards are a consideration as well. Your amounts are small, even if you bought 10 $50 gift cards in the same transaction, you are under the magic amount right? It would seem that was acceptable. I really am curious about this. I really wanna know where the dividing lines are for stuff like this.

lrprn--yes, you are exactly right, that case I referred to was about a preferential transfer to an insider. I've been so consummed with this lately. But wouldn't (technically) a purchase for yourself or the benefit of your spouse/family/business be considered 'insider', say for instance "gift cards" for family expenses. That's why I was considering it as such. And pre-payment of utilities just 'preferential transfer" (but no matter cuz if it's under a certain amount it won't be avoided). How's your knowledge of pref trans to insider? I have a few specific questions I need answers for.

We have such a great wealth of knowledge here, but it is so spread out, it is really hard to find. I would LOVE to see some flat out lists "stickied" for what you can/can't do. Some lists for things to consider pre-bk that are legal not fraudulent (proper conversion of non-exempt to exempt assets, dollar amount limits, time limits etc). Doesn't feel so disempowering if you find you can exercise some control ahead of time.

I was told that paying utilities in advance wasn't considered preferential.

[monkatom]

Catia,
My lawyer seemed fine with it as long as there were not large purchases of gift cards. So I have been doing this for about two months now buying gift cards for gas, food, and clothing stores. I also cashed out my CC points for gift cards so I probbaly have 1200 in gift cards with none over 50 bucks. Never paid more than 300 at grocery store either so unless trustee looks at all receipts and asks what ahppened to gift cards hopefully I should be fine.

[ssdsco]

Catia,
My lawyer seemed fine with it as long as there were not large purchases of gift cards. So I have been doing this for about two months now buying gift cards for gas, food, and clothing stores. I also cashed out my CC points for gift cards so I probbaly have 1200 in gift cards with none over 50 bucks. Never paid more than 300 at grocery store either so unless trustee looks at all receipts and asks what ahppened to gift cards hopefully I should be fine.

If you have $1200 in gift cards when you file and don't list them as assets it seems to me that's fraud. I don't see any difference between that and stashing $1200 under the mattress. I may be missing something here.