Another Christmas gift question....what to do about cashing checks....

[justbroke]

Have your Mom (or you, on her behalf) file a UCC-1 Form on the items and then they remain her property, not yours, and are in your home only on loan from her. Alternatively or additionally, sign a Promissory Note for the value of the goods, plus 10% interest, with the goods as security, and record that on a UCC-1` Form, and nobody can touch the goods until the Note is paid. If you file bankruptcy, your Plan simply includes surrender of the goods back to the Holder (mom). She just leaves it at your place. You use it, she owns it. Remember: you haven't paid for it.

Do not do this as it is pure and simple fraud. It either was a gift or it was a loan. Don't confuse the two. This Forum does not condone bankruptcy fraud in any manner. Clearly, the poster indicated that this was a gift and now is being instructed to commit bankruptcy fraud by conspiring with her mother by signing and recording a false UCC-1 form.

Any court would especially be suspicious that the UCC-1 is recorded by a family member, on household goods.

[AngelinaCatHub]

Reading through this thread, I have to agree with JB. Formulating ANY KIND of gimmick to "beat the system" is fraud.

The Bk Court is very kind. This I have noted myself and with others stories. Only if they suspect any 'hanky-panky' they will come down very hard. Understand, this is Federal Court and in your 341, you take an oath and it has been known to happen that a perjury charge filed against a broken oath. Now you are in Federal Criminal territory.

The secret, which should not be secret, is total honesty. This will buy much forgiveness with not only the local Trustee, but the USTrustee if he gets involved for any reason.

Once you take that oath, you are on your own. This is why it is highly recommended that you have a lawyer. Nothing wrong with pro se if you play it straight, but this is also why this forum has an up front disclaimer that we give NO LEGAL ADVICE.

Bad advice is also not legal advice. Bad advice becomes legal when you take an oath on it.

It is my opinion, that "Justfilesuit" has given bad advice. Many long timers here have seen this before. I hope it was of honest ignorance and not a way to use in beating a system that will beat back once discovered. Oh, and one thing more, these people have seen it all before. That is why they look at paper trails. 'Hub

[Meatstick]

We have a 2nd meeting with our attorney this week and plan to let him know what my mother gifted us this past week. I priced it on Best Buy website and for the tv and dvd player it is around $1200.

I have to agree with JB and AngelinaCatsHub. It just seems best to inform the lawyer and let him list it as it should and then let the chips fall where they may. We are in the process of trying to inventory our household goods and attempt to properly price them so we don't draw the attention of the TT or UST.

Thanks for the replies.


Meatstick

[LimpDisc]

At least hooking it up and using it turns it into a used asset. No longer worth $1200 to anyone. Not sure how much value was lost, but the brand new in box value is gone.

[AngelinaCatHub]

We have a 2nd meeting with our attorney this week and plan to let him know what my mother gifted us this past week. I priced it on Best Buy website and for the tv and dvd player it is around $1200.

I have to agree with JB and AngelinaCatsHub. It just seems best to inform the lawyer and let him list it as it should and then let the chips fall where they may. We are in the process of trying to inventory our household goods and attempt to properly price them so we don't draw the attention of the TT or UST.

Thanks for the replies.


Meatstick

Thank you for your wisdom. Now on your household stuff: You remember what you purchased the stuff for. Put that aside, pretend that you are at an estate sale or yard sale. Price it without sentimentality. This is not at all questionable. Too many people price stuff at what they paid for it or the replacement value. Price it as if you needed a pawn shop item. 'Limpdisk' is right, devalue the Mother's loan if that is the case, but if you are going to pay her back 100% do not devalue it. It is a debt. List it also. It would be discharged, but you can pay anything after your bk.

The number one thing you wish is a trouble free bk and close.

[Meatstick]

I don't owe any debt whatsoever to my mother. She just up and called and told me there was a gift mechandise pick-up for us at Best Buy. She does know we are going to file BK. I about shat myself when I went there to pick it up and found out what it was !! We now have a total of 4 TV's with 3 of them old 25" Tube TV's. I think $25 each is a safe bet.


Meatstick

[JustFileSuit]

Ownership of a "gifted" Asset

The matter of the "ownership" of the "gifted" TV is not as simple as the respondent posters would have you infer. Here's why:

The goods are not Titled Goods, e.g. like an auto or boat. They are "general merchandise." Claims of either ownership or funds for purchase of untitled goods are recorded via a UCC-1. Let us assume that the (now-notorious) TV develops a problem that requires some warranty action, and/or government-issued recall for refund for say faulty wiring that would lead to a fire. The TV was purchased by a credit card. There is no dispute that the purchaser was the grandma. Who gets the refund? Who has the status of purchaser to make the warranty claim? Only grandma. There is no recordation of transfer of title or ownership with the vendor or the manufacturer to allow the BK poster to stand in the shoes of grandma.

The unit is recalled, the funds go back to the charge-card of grandma. She is the recorded purchaser. There is zero chance that any money is going to be issued to the BK Poster.

So, what did grandma really "gift?" She gifted the use of the TV, not the actual unit itself. It is not the property of the recipient simply because neither the charge nor the warranty goes to the BK poster or family. And, equally, grandma has not formalized the "gift" of the item itself with any paper trail.

I appreciate that this flies in the face of what we perceive as "gifts," e.g. when you receive a pair of socks for Christmas; but those are items that do not attract the scrutiny of the cc purchase slip or the warranty or the recall status outlined above. Grandma gave you a "gift," but she didn't really give you a "gift," because the steps needed to perfect the claim of ownership were never taken by the parties. The "gift" was not registered with the manufacturer or the Store. Sure, the TV was picked up at a local outlet, but the pick-up is a mere "instruction" of the purchaser, it does not alter the status of the purchaser. For example, if you buy a riding lawnmower from Wal-Mart and hire a cartage company to go pick it up and deliver it to your house (it won't fit in your Honda Civic!), that does not transfer title to the cartage company either.

All grandma has actually done, presumably quite innocently, is grant you a usage interest in the goods. Nobody else in the chain of manufacture or distribution is recognizing your "ownership." Given the imperfections in the presumed transfer, there is no foundational reason to not file a UCC-1, until grandma gets around to issuing you a Certificate of Gift -and she certainly is not doing that.

You can argue that grandma's "intent" was to issue you a Gift of the actual goods - but who are you, or any outsider, including the trustee, to claim that they have special access to the mind of grandma? Cannot be done. All anybody can do is look at the paper trail. And the paper trail stops with the cc slip - singed by grandma. Sorry, folks - not only not fraud, but that is the actual status of the goods. Still hers - until she declares in some recordation that it is a "gift."

[justbroke]

Sorry, I was busy laughing so hard, I forgot what I was doing.

Sorry, folks - not only not fraud, but that is the actual status of the goods. Still hers - until she declares in some recordation that it is a "gift."

Bzzzt. Next contestant please! Status of the "gift"... please. They call it a "gift receipt" for a reason. LOL. Warranty claims are for people who register the warranty. This is not always the purchaser. You should read a few warranties and see if you see the word "only the purchaser may register a warranty". (Let me help you out... "original purchaser" includes anyone who receives it as a gift upon initial purchase.)

Moving assets to hinder, delay, or defraud any creditor, is a fraudulent transfer under 11 USC 548. What you are advocating is constructive bankruptcy fraud. There is no way to slice this.

The items were already given as gifts. There is no UCC-1. There was no consideration or contract at the time the items were gifted. Now you're saying that magically, the mother can make these "non-gifts" and now deem them as property for which there is a security interest in them, from the mom.

This is specifically why 11 USC 548 exists... to stop this type of fraudulent activity. The United States Trustee (UST) has seen this time and time again where debtors attempt to "hide" property of the Estate by transferring it to friends and relatives by whatever means necessary. This is no different because you are arguing that they are gifts, but not gifts.

I would not follow any of the "advice" posted. I mean, you are discussing fraudulently "hindering, delaying or defrauding" creditors by coming up with schemes to create the appearance that there is a security interest when there is not.

Furthermore, following any of this advice may lead to a permanent injunction against the debtor, causing them not to be able to discharge any debt that was scheduled in the case, if there is actual fraud proven.

The nice thing about Bankruptcy is that if you're honest... it doesn't hurt.

[JustFileSuit]

[QUOTE=justbroke;361904]

Sorry, I was busy laughing so hard, I forgot what I was doing.

Not a problem. I don't mind a bit. But laughter does not change the analysis.

Bzzzt. Next contestant please! Status of the "gift"... please. They call it a "gift receipt" for a reason. LOL. Warranty claims are for people who register the warranty. This is not always the purchaser. You should read a few warranties and see if you see the word "only the purchaser may register a warranty". (Let me help you out... "original purchaser" includes anyone who receives it as a gift upon initial purchase.)

Sorry, chum. that is not the sequence of events here. Grandma ordered a big TV from BestBuy. She pays for it. There is no recitation of a "gift receipt:" she tells BestBuy that it will be picked up by her son-in-law. that is as far as it has gone.

What you are advocating is constructive bankruptcy fraud. There is no way to slice this.

Sorry, JustBroke, your analysis is flat-out wrong. Although it may not seem intuitively obvious, it is incorrect, and here is how you can demonstrate it:

The Debtor son-in-law packs up the big TV in the original carton, goes back to BestBuy, and says at the refund Counter: "Uh, when I got this home, it really was too big for the room, and the trim finish doesn't match the decor. I would like my $1200 back in cash please." The clerk checks the order number against the cc issuer. "Oh, that was purchased by a Mrs. Martha Stuart." "Uh, yea, well, she's my mother-in-law, and she gave it to me. "

Now don't be surprised if some rather sturdy fellows with very short haircuts arrive driving a Ford Crown Vic and invite the debtor son-in-law to be their guest for the evening downtown.

[forgotten]

The Debtor son-in-law packs up the big TV in the original carton, goes back to BestBuy, and says at the refund Counter: "Uh, when I got this home, it really was too big for the room, and the trim finish doesn't match the decor. I would like my $1200 back in cash please." The clerk checks the order number against the cc issuer. "Oh, that was purchased by a Mrs. Martha Stuart." "Uh, yea, well, she's my mother-in-law, and she gave it to me. "

Now don't be surprised if some rather sturdy fellows with very short haircuts arrive driving a Ford Crown Vic and invite the debtor son-in-law to be their guest for the evening downtown.

Or much more likely, "I can refund the amount to the original credit card or issue a merchandice credit. Which would you prefer?"

[justbroke]

Unfortunately, you're equating the merchant's policy on a refund with whether something is property of the debtor. Two totally different things.

I will repeat this so it is clear. This particular thread was about a debtor that received a gift from their mother. It was already established as a gift. You now want to "hide, hinder, or delay" creditors by having the mom file a UCC-1 making it a non-gift. That is by definition (and the intent of the Statute), fraud. Since the only way that your theory works is to divine that all gifts purchased by credit cards belong to the purchaser, then I should have put an additional $200K+ on my Bankruptcy schedules as property; since I purchased many gifts over the years. That's illogical. Yet that is your stance on the subject.

If you go back and amend your statement to say that... if the mom "wanted to give" you a present (indicating something in the future and something that hasn't already occurred), then your gimmick might work. However, in this line of postings, you continue to fail to see that you're trying to change a transaction that occurred in the past. There is a big difference in the two.

If you don't believe me... have your mom give you a gift. Then, after the fact, have her file a UCC-1. File bankruptcy. Then go tell the UST that you received this as a gift, but then, after the fact, had mom file a UCC-1 because it's a gift and you didn't want it within reach of your creditors. See how that works out for you.

Quite simply, all a person need say, is that the item doesn't belong to them. However, you created an elaborate ploy to somehow record information that is wrong. If the property doesn't belong to the debtor, the "owner" need not falsely file a UCC-1, chattel, or other financial instrument with the appropriate authority. Nothing changes the fact in this original post that the person already received it as a gift and the intent was to gift the item to the person. None of the other hocus-pocus matters.

In any event, I would never advocate doing anything that you suggest. It flies in the face of fraudulent conveyance, and is specifically why the statute was written. Why do you think the Trustee has extraordinary avoidance powers? For people who think just as you do.

[JustFileSuit]

Or much more likely, "I can refund the amount to the original credit card or issue a merchandice credit. Which would you prefer?"

- No "merchandise credit." The debtor is not the purchaser. On what authority? The guy who brought it into the store? Not likely.
- No "cc refund." The debtor is not the purchaser. On what authority is the product being brought into the store?

How does the refund Clerk know that you have not "lifted" the item from her? Happens all the time, especially if the new-found benefactor has to feed a meth habit. (You see the problems).

You see these kinds of situations more with elderly grandmas were grandma is unable to effectively resist the emotional pressures brought by a child, and/or where grandma is going into degenerative dementia, and/or where grandma is using a cc but has no cash savings and little social security.

When grandma ends up with a stroke and in a nursing home, then the Probate Court appoints a Fiduciary. He starts looking at these transactions, and finds the $1200 TV sitting in the son's (or in-law's, whatever) house. There is no document that memorializes it as a "gift." You can be sure that the Fiduciary is going to demand that the estate be reimbursed for the value of it.

If grandma made a gift of a toothbrush to the son or daughter, or a dozen toothbrushes to the family, and paid for it with a cc, then there would be no issue -there is a presumption that grandma was not simply placing the items, and she doesn't want the used toothbrushes back (neither does the Fiduciary). Any presumption on something durable and expensive is self-serving; expect it to be challenged by the Fiduciary. You see this in cases where the now-laid-up grandma has her place visited by children, adult grandchildren, nieces, second cousins, whatever, and now her jewels, silverware, fur coat, furniture, whatever starts disappearing. Invariably the response is "Grandma meant for me to have this," "Grandma promised it to me," "Grandma gave it to me." And the fiduciary demands its return. You have at best an "unperfected transaction."

I am not going to beat this to death; Hub, forgotten, broke, et al can take whatever view they like. My comment is: if grandma wanted to establish an iron-clad gift transaction, then she would have issued a check, made out jointly to "Son-in-law and BestBuy," let the in-law sign it, and have the store accept it as funding for the item.

In the alternative, grandma could have issued the check to the in-law, and let him do as he pleased. [Then it would be "income."].

In the alternative, grandma could have written a Christmas Card that read in substance: "Enjoy your new TV, serial no. 770356147. It is my gift to your family for Christmas."

None of that is the case in this specific post. There is no concrete evidence that title to the goods has passed. You can memorialise it by having grandma write a Memorandum of Gift (assuming that she is both solvent and competent, and not under undue influence or duress), or you can send the TV back to her house, or you can come up with some other arrangement, including generating a Note and filing a UCC - whatever sets it down. To suggest that it is "yours" only under the terms as set forth is folly.

[justbroke]

Wow, given what you wrote, I need to start writing out Certificate of Gifts for all those things I passed along over the years. Wouldn't want anyone thinking that I still owned it, after I gifted it to them.

You continue to confuse the issue of the purchase transaction and what constitutes property. I wish you luck in that line of having Mom issue UCC-1s to counter a gift declaration. I guess I am more ethical in my transaction behavior.

Please forgive me... I need to go memorialize all those gifts over the years before the Trustee reads your post and finds that I still "own" them all.

Edited to add: also realize that making "Mom" a secured creditor will now require you to list her on your petition as such. This will be ever more fun when the Trustee asks to see the perfection of the lien and you present a UCC-1 on a television. You had better hope that was recorded correctly or the Trustee will summarily void the transaction, take the TV and liquidate it anyhow. Why not just stay above board?

[forgotten]

I would love to see the faces of the judge and trustee when someone presents these as arguments as to why you swear you are not trying to defraud the bankruptcy court.

[justbroke]

I would love to see the faces of the judge and trustee when someone presents these as arguments as to why you swear you are not trying to defraud the bankruptcy court.

Me too.