text: Helping Niece with College - Bankruptcy Forum Chapter 7 13 341 Meeting Credit Collections
  Helping Niece with College
  How much causes a Trustee to ask questions? I thought any amount of $600 is questioned if made within the last 90 days or 6 months.
  I was helping my niece with living expenses in college (did stop in May). I did this for about 9 months until I got a levy by the IRS on my bank account.
  The amount was 500/mo. Is this cause for worry?
  I just filed on the 30th.
  Since your niece was not your legal dependant the Trustee can recover all of the $4,500.00 as a "fraudulent conveyance". The Trustee can recover such a conveyance, under bk law, if the conveyance took place within two years prior to filing, and/or under State law if State law has a longer "look back" period.
  In addition, Question 7 of the Statement of Financial Affairs requires you to disclose all gifts made to family members in excess of $200.00 for the full one year prior to filing. If you did not list the gifts on question 7 you need to amend question 7 to properly disclose the payments.
  I had been so caught up in emotions that I didn't think about this. I was going through my bank statements today and realized I'd forgotten about the payments to her.
  I've already contacted my attorney to get the schedules updated. Luckily I have the money to provide to the trustee out of my last check.
  I just wanted to make sure what I needed to do.
  Does it make a difference if I'm doing a chapter 7 or chapter 13 in how this will get treated?
  I'm in a chapter 13.
  If chapter 13, than a non-issue so long as your chapter 13 plan pays at least $4,500 over the life of the plan. If a chapter 7, then you have a big problem.
  HHM: It's actually 3,500 (I just went back and reviewed bank statements). Paying 3,500 back to who?
  How does this portion work?
  Originally posted by minan View Post
  To unsecured creditors. So, now you do have a minimum that needs to go to unsecured creditors. But, much less than the 19% that your plan currently provides.