341 Problem

[kinks711]

What is the name of your state? Pa

Went to my 341 on Wednesday and trustee asked about house I sold in Oct 1999 and the proceeds were given to my mother (whom I owed) in Oct 1999. She in turn bought a house with this money in Oct 1999. I filed BK on 3/30/04 and the trustee might consider this a fraudulent transfer. He wants more details. This was not done to conceal money- my mother's health was bad and she was buying this house so my wife and I could live with and care for her. Do you think this sounds fraudulent? This was 4 and a half years ago and I did not consider filing BK until after a lawsuit in Jan 2004.

 

[HomeGuru]

What is the name of your state? Pa

Went to my 341 on Wednesday and trustee asked about house I sold in Oct 1999 and the proceeds were given to my mother (whom I owed) in Oct 1999. She in turn bought a house with this money in Oct 1999. I filed BK on 3/30/04 and the trustee might consider this a fraudulent transfer. He wants more details. This was not done to conceal money- my mother's health was bad and she was buying this house so my wife and I could live with and care for her. Do you think this sounds fraudulent? This was 4 and a half years ago and I did not consider filing BK until after a lawsuit in Jan 2004.

**A: no it does not but fully explain and document the issues such as the money owed to her, long term care etc.

 

[InsulinRules]

I'm curious as to the "HOW/WHY" questions about the house transfer from 4 years ago even arose. Just how far back is this trustee looking?

 

[HomeGuru]

I'm curious as to the "HOW/WHY" questions about the house transfer from 4 years ago even arose. Just how far back is this trustee looking?

**A: usually Trustees go back 2 years and some even use a microscope but yours is using a telescope.

 

[kinks711]

Thanks for the quick responses. I'm not sure how the trustee got started on this but it was probably because one of my assets was a bad debt of $22,700 from the sale of this house. The corp that bought it closed down and the atty general couldn't find the owners. I guess trustee wants some money from this transaction even though it was 4 1/2 years ago.

 

[AttorneyOney]

After a recent Rhode Island case, trustees are increasingly relying on the common law of fraudulent conveyances to look WAY back under section 544(b)(1). Furthermore, YOU don't even have standing to object -- that right belongs to the transferee of the property. Mom might defend on the basis that you lacked actual intent to defraud creditors and were not insolvent at the time of the transfer. If the information you give to the trustee substantiates those defenses, he might not pursue the issue.

 

[planner]

> probably because one of my assets was a bad debt of $22,700 <

If its a bad debt you should of listed it at the FMV not what you lost (best guess its worth zero).