     David Temkin (Dtemkin) | Friday, September 08, 2000 - 06:48 pm 
Does anyone know what the policy is regarding including family debts in ch7 as an unsecured non-priority claim? I owe my mother something around $15,000 - and while I don't necessarily intend on never paying her, I'd prefer that be included so that my income-debt ratio looks better.
Thanks,
-Dave |
| Don Semler (Dsemler) | Saturday, September 09, 2000 - 04:55 am
Dave,
Don't know about you Ch7 question, but how would a lender know you owe your mother money? I'm assuming she doesn't report to the CRA's. |
| Mitch (Voigtkampff) | Saturday, September 09, 2000 - 09:06 am
What income-debt ratio are you talking about? That may be a factor for manual underwriting for mortgages, but it is not a factor for qualifying for bankruptcy. Maybe you are saying that you only have one debt, and you don't want it to be obvious that you are filing bankruptcy just because of that one creditor, so want to list you mother as well????
There is no special treatment of debts owed to parents. That do not have any automatic priority. But listing her as a creditor can cause problems. A trustee might reasonably ask whether or not you have paid back any of that debt in the past year, in which case the amount repaid is arguably an insider preference which your mother would have to pay back to the trustee, for the trustee to then pay to all creditors (including her) after deducting the trustee's share. A trustee might ask for a year's worth of canceled checks to see for herself whether or not you actually repaid your mother. Also the trustee might reasonably ask when you got the money. If you got it in the last 2 or 3 years, it would have to be disclosed as a source of income in you Statement of Financial Affairs, items 1 or 2. And that would arouse the question of what happened to the money. The trustee might demand an accounting. It might arouse other questions. This is just an off the cuff response. |
| David Temkin (Dtemkin) | Saturday, September 09, 2000 - 10:48 pm
To be honest, what it comes down to is that I ran up about $15,000 of charges on her credit card about 3-4 years ago. I have reimbursed her VERY little, and none at all in the past year... So, I suppose I should include her.
-Dave |
