Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.
Was the $50,000 paid to your husband's mother money owed to his mother, or was it a gift?
Then it is correct that the Bankruptcy court could not take that money back after one year. (It would have been 2 years if the $50,000 was a ''gift'
', and not a loan repayment.)
It is not necessary to disclose the receipt of money the debtor no longer has.
It does not matter the settlement money was received after the debt was incurred. Additionally, the Bankruptcy court only wants to know about lawsuits that were in progress one year or less before the Bankruptcy was filed.
The debtor is asked if there were any loan repayments to family members within one year before filing, and if there were any gifts made to family members in the 2 years before filing.
In other words, the lookback period is one year or two years - no longer.
If the creditors do not find out about the money before it is spent (so they can attach it), there in nothing they can do - unless the money is spent on something the debtyor still as - such as a car.
She may be worried that she will not be able to prove that she no longer has the money.
However, since the settlement was received more than one year ago, that settlement is not something the Bankruptcy court can look at, unless she gifted more than $200 to any family member less than 2 years before she files a Bankruptcy.
I am trying to explain that she may not have to.