Posted by Brian Barnes on December 14, 2014
With the Christmas season upon us again we thought it would be a good idea to go over how giving and receiving gifts can affect a bankruptcy filing.
While a credit card can still be used before filing for bankruptcy it should send up red flags and lead to extra follow-up with clients when preparing a bankruptcy petition. Gifts given or received may play a role in what is dischargeable and what has to be repaid during the bankruptcy. If credit cards are only used to pay for necessities such as food, clothing, and gas there probably won’t be any problems. If credit cards are used for luxury items, gifts, cash advances, etc. you may not be able to get these purchases discharged (depending on amount of purchase).
In addition to gift giving affecting the filing, receiving gifts or money may play a role in the bankruptcy also. When receiving a gift it needs to be listed as an asset on the petition and is subject to possible liquidation. When money is received it needs to go on the Means Test as income. Depending on the amount it could have a real effect on the bankruptcy and may even push your client over the median income. This may disqualify them for a chapter 7 and force them into a chapter 13 or waiting to file till it won’t be counted on the income.
While preparing petitions we should be aware of unique situations that may arise during the bankruptcy process and bring them to the attention of the attorney. Extra attention and detail will only increase your value to the attorney.
For more information on bankruptcy training check out our training packages at 713Training.com and don’t forget you can reach our support team for free by calling or emailing.
At 713 Training we would like to wish you a Merry Christmas and a Happy and Productive New Year.
-The 713 Training Teamwww.713Training.com
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Disclaimer: We at 713Training.com are not attorneys; any information provided by 713 Training should not be considered legal advice. The information in this article, and any other materials provided by 713 Training, whether delivered verbally, written or via any other means, including electronic/digital delivery and storage, is for training purposes only, and is intended for individuals who work under the direction of a licensed attorney.