BK7 to BK13 ?

[dosumi]

What is the name of your state?CA

We have to change from our BK7 to BK13 due to a loan from my in-laws that we did not do correctly back in 1998 when we borrowed money to buy a business. In 2003 we had to sell the business and we paid off that loan.

After waiting well over a year to file BK7 on the advise of an attorney, then find out that the loan payoff was still at risk.

What about in a BK13, is this loan payoff safe.
If we file BK13 is there still a possibility the trustee could still go after it.

Doesn’t BK13 process work almost the same as BK7. Except 13 you have to make payments. the 341 meeting, etc.
Won’t the Trustee ask where all this debt came from, and if we say mostly from a business we had, then what?


Thanks

 

[dosumi]

Shorter question

I hope this is better I removed a lot of text, just want to know how a BK 13 works, when It comes to insider payment???????????/

 

[dosumi]

OK I quess that question is no good.

So how about this.
In a BK 13 our payment will be about $300 month for 3 years. or $10,800
Now that will end up to be after attorney and trustee fees less than 10% of the amount we owe.
If we contact our creditors and offer them 20 to 30% and they accept, will they all send us 1099 forms for the write off amount or just some of them, how do you know, do they state it when you make the offer?
If they all report on a 1099 we could not do it the taxes and penalties would be to much to payoff.
Most of our creditors have offered discounts from 50 to 60%, without us even speaking to them.
I assume that you can make a deal with creditors even after you file BK, and then withdraw the BK?

 

[Ladynred]

Yes, you can 'deal' with the creditors, BUT, withdrawing the BK is still going to paste the bankruptcy to your credit reports. Since creditors are barred from collection action while you're IN bankruptcy, there's no guarantee once you have your CH 13 dismissed that they won't renege on your 'deal'.

1099's may be issued, but if you can show the IRS that you were insolvent when the debt was 'forgiven', then you do not have to report the 1099's as income.

This 'insider' payment you asked about. Generally, unless you have a written agreement with them to pay them back, it may not be considered a 'valid' debt by the Trustee and the Trustee might still go after that money from the 'insider'.

 

[dosumi]

Thanks for the reply,

the loan agreement is the reason we have to try to do the BK 13.
We had an agreement signed back in 1998, but none of us new it had to be recorded, to place a lien on the business we bought to make it legal.
We paid all the payments for 5 years to the loan company and the final payoff went directly to the loan company, only problem was the loan wasn't in our name. So here we are.
The attorney says now not to file bk 7 because of the loan, but if it is still at risk even in a BK13, why not try for the BK7?
or don't do either, if we can get the amount low enough, we may be able to borrow again from the in-laws. but would have to find out about the tax part first. loan & tax payment would be to much.
Thanks again

 

[dosumi]

definition of insolvent

"But if you can show the IRS that you were insolvent"?

Do you know how the IRS determines being insolvent?
If you have more debt than assets or you can't pay the minimum payment on debts, etc.
It seems that different agencies have thier own definitions or criteria.

Thanks

 

[Ladynred]

If you have more liabilities than assets, you ARE insolvent in the literal sense. The IRS has a form (don't they always !?) you'd fill out, a kind of worksheet, that would, in the end, prove or disprove your claim of insolvency.