By Richard K Gustafson, II
One of the questions asked of debtors filing for personal bankruptcy is whether or not he/she has transferred any "money or property" within the last one year. Why does the bankruptcy trustee care about that?
Payments to family members give rise to suspicion that the debtor is attempting to hide assets from creditors by disguising gifts to family members as "loan repayments." It's possible someone could give a family member money so it won't be lost when filing for bankruptcy.
If you have given a family member money, even for a perfectly legitimate reason like paying back money you've actually borrowed from them, the person that the trustee will sue to get the money or property back will be the family member you thought you were helping by paying them your money! All you would be accomplishing is getting your family member sued by a bankruptcy trustee, potentially. This would make things worse for you and your family, not better.
By Richard K Gustafson, II
One of the questions asked of debtors filing for personal bankruptcy is whether or not he/she has transferred any "money or property" within the last one year. Why does the bankruptcy trustee care about that?
Payments to family members give rise to suspicion that the debtor is attempting to hide assets from creditors by disguising gifts to family members as "loan repayments." It's possible someone could give a family member money so it won't be lost when filing for bankruptcy.
If you have given a family member money, even for a perfectly legitimate reason like paying back money you've actually borrowed from them, the person that the trustee will sue to get the money or property back will be the family member you thought you were helping by paying them your money! All you would be accomplishing is getting your family member sued by a bankruptcy trustee, potentially. This would make things worse for you and your family, not better.
