momof5blessings Posted April 13, 2007 Report Share Posted April 13, 2007 We will be filing CH7 in the next 2-3 weeks. We have inventory from our business (maybe 10K at liquidation prices) that we'll be selling in the next few weeks to get the $$ to pay the attorney and get a car (we're letting ours go back because we won't be able to make the payments). That would use up about 6K and the attorney said we have to make sure to account for every dime we spend. I don't want to cause ANY problems with the trustee as to what we spend. However, I'm not sure what would be OK.We have an immediate issue with our water pressure and we'll have to dig out our water line and divert it. We do most of our own home repairs. That may cost about $500 if we have to rent a backhoe. We desperately need gravel for our 900ft driveway and that will be 2-3k. If we don't do it with the proceeds from inventory liquidation it will be alot longer before we're able to do it. We really do need to do this, but we won't "die" if we don't. We also need to finish the soffits (sp?) around our roof line, but we can't do that one on our own and that will be about 2k. However, we haven't done it in all this time (3 yrs) I'm not sure about it.I feel like everytime I spend any money, I'm going to have to justify it. I'm doing some gardening and I would like to get some landscaping timbers, etc, but I'm not sure if that will cause red flags. Link to comment Share on other sites More sharing options...
LadynRed Posted April 13, 2007 Report Share Posted April 13, 2007 I feel like everytime I spend any money, I'm going to have to justify itAnd that is EXACTLY what you will have to do when spending money from the inventory sale. The Trustee's view is that the money should go to pay your creditors, however, NECESSARY home repairs likely wouldn't be challenged. I rather doubt gravel for the driveway would be considered 'necessary' whereas fixing a leaky roof or replacing a water heater certainly would be. You're going to have to curb the 'nice to do' list and only focus on 'gotta have to live' items, otherwise you'll be in hot water.Oh, and no paying off loans from friends and family, that is a HUGE red flag and is considered preferential payment. You'll wind up with the Trustee suing your friends and/or relatives to recover the money you gave them. Link to comment Share on other sites More sharing options...
momof5 Posted April 13, 2007 Report Share Posted April 13, 2007 One thing I did was list my family loans in my BK. Family members were able to use their notice from the trustee that they had a bad debt to the IRS and deducted it from their taxes! They won't get all their money from ya (now) but it will help them in the interim!(Oh, and I did have signed 'loan' agreements with the family. They did consult with a tax atty before taking the deduction. There was never a problem from the IRS.) Link to comment Share on other sites More sharing options...
bingo Posted April 13, 2007 Report Share Posted April 13, 2007 A reasonable use of funds would be medical care. Get the family dental work done, eye exams, new glasses,etc. Link to comment Share on other sites More sharing options...
momof5blessings Posted April 13, 2007 Author Report Share Posted April 13, 2007 You're going to have to curb the 'nice to do' list and only focus on 'gotta have to live' items, otherwise you'll be in hot water.OK, that clarifies it for me. DH started working on the water issue we have and he's doing it without a backhoe. It wasn't *necessary* to use a backhoe, but it would have helped.We REALLY need this BK to go through. One thing I did was list my family loans in my BK. Family members were able to use their notice from the trustee that they had a bad debt to the IRS and deducted it from their taxes!They won't get all their money from ya (now) but it will help them in the interim!(Oh, and I did have signed 'loan' agreements with the family. They did consult with a tax atty before taking the deduction. There was never a problem from the IRS.)I'll have dh talk with his dad. We don't have a signed agreement, but I'm sure we can remedy that. His dad is going to hit the roof when he finds out we're filing. We will have to eventually pay him back completely (12K) or our lives will be miserable. I'd rather owe the cc companies His dad is always complaining about how much he has to pay in taxes so this will help. I can always hope that he'll forgive the debt if it helps him on his taxes, but I won't hold my breath. A reasonable use of funds would be medical care. Get the family dental work done, eye exams, new glasses,etc.I need new glasses so bad, but I didn't even think of that. We have excellent dental coverage, so that's not an issue. However, we are going to a chiropractor (all 6 of us) and we have a contract with him for a year for 1200. We've made 3 payments of $100 so far and have 9 left. If I paid him that 900 with sales from inventory, would that be a problem? It would relieve 100/mo off our budget. But I definitely don't want any issues with the trustee.DH's company is paying for stress counseling and financial counseling and he's actually agreed to it. They are also able to get a 25% discount on the attorney's fee. We have another meeting next Wed in Columbia. Thanks so much for your help! This forum has helped us tremendously!!I have more questions, but I'm not sure if it would be better to just ask them here or start a new thread. I know when I was searching the forum, it was easier with a new thread with a descriptive title. However, I don't want to clutter the board. Link to comment Share on other sites More sharing options...
LadynRed Posted April 13, 2007 Report Share Posted April 13, 2007 You can always pay your DH's father back AFTER you've gotten your discharge and the dust settles. There is nothing that says you cannot voluntarily pay back any creditor after bankruptcy. Link to comment Share on other sites More sharing options...
momof5blessings Posted April 15, 2007 Author Report Share Posted April 15, 2007 I bought a Golden Retriever puppy from a friend of mine. We came to an agreement of $250 and us paying what we could and when we could. I've never paid for an animal before in my life, but we're "hoping" to breed her to pay for some of our school expenses and as a school project (we homeschool). Of course, at this point, we don't know how it will all work out. I've only paid my friend $50. If I gave her the final $200 now, will that cause concern with the trustee? Thanks for your help. Link to comment Share on other sites More sharing options...
momof5blessings Posted April 15, 2007 Author Report Share Posted April 15, 2007 You can always pay your DH's father back AFTER you've gotten your discharge and the dust settles. There is nothing that says you cannot voluntarily pay back any creditor after bankruptcy.Eddie spoke with his dad yesterday. He's NOT happy that we won't be paying him right now. Link to comment Share on other sites More sharing options...
LadynRed Posted April 16, 2007 Report Share Posted April 16, 2007 If I gave her the final $200 now, will that cause concern with the trustee? It could, because it's still considered a preferential payment. Unless you've got a purchase contract for the pup, I wouldn't do it, especially if you write a check that will go thru your bank account. Link to comment Share on other sites More sharing options...
momof5blessings Posted April 16, 2007 Author Report Share Posted April 16, 2007 Thanks, I'll hold off paying her for now. I'm sure she'll understand. Link to comment Share on other sites More sharing options...
momof5 Posted April 17, 2007 Report Share Posted April 17, 2007 I had a signed loan $6K with my parents. I showed them how they could deduct it from their taxes as a bad debt. Their tax guy spread the deduction across 3 years. My folks took what they saved on taxes and applied it to what I owed them (internally of course). I later sent them a check for the difference when I sold my house.If you can show him how he can save money on next years taxes, maybe he won't be so upset. Link to comment Share on other sites More sharing options...
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