When you file for bankruptcy in Missouri, it is necessary to disclose to the court any creditor (excluding any mortgage or car creditor) to whom you have paid significant money in the three months before filing. If you have paid in excess of $600 in any single transaction to a common creditor (like a credit card or medical bill) in any of those three months prior to filing, the Trustee has the opportunity to demand that the creditor give the money back so that the Trustee can more evenly divide the funds. This kind of scenario does not negatively affect you in any way, but it is still something that you are required to disclose.
A St. Louis Bankruptcy Attorney can Protect Your Friends and FamilyOn the other hand, the court also requires that you describe any transfers of money to friends or family that occurred within the last full year before filing a St. Louis bankruptcy. Whether this money was simply given away as a gift, or was used to pay back your mother for a loan you owe her, the Trustee has a right to know about it. If the total amount of money transferred during that year was significant (ex. $1,500 or more), then it is quite possible that the Trustee is going to be interested in those funds.
If the amount transferred to a friend or family member was in fact high, the Trustee in a St. Louis Chapter 7 bankruptcy can demand the money be turned over to the court. This obviously puts your friend or family member in tough place, because if they have already spent the money, the Trustee can still demand that they pay the funds back to the court. If a St. Louis Chapter 13 bankruptcy is filed, your friends and/or family is safe, but you will most likely be required to include that amount as part of your repayment plan (so if you gave $3,000 to your brother six months before filing a Chapter 13, the Trustee will demand that you pay $3,000 to your unsecured creditors over the course of three to five years).
The rules regarding the transfer of money to friends or family before filing for bankruptcy are very complex, and the consequences can be high. But this is why it is so very important to seek bankruptcy legal services from an experienced and knowledgeable firm. The affordable St. Louis bankruptcy lawyers at The Bankruptcy Company have been making sure our client’s rights are protected for years. Our goal is to get you the fresh start / clean slate that you deserve so that you can move on with life towards financial freedom.