The Christmas before Bankruptcy

Depending on your family, Christmas gift giving may be huge or it may be minor.  If you fall in the former category and you are considering a bankruptcy you need to be aware of some bankruptcy rules which could impact your bankruptcy filing.

Gift giving and bankruptcy:

If you are a big giver and routinely rack up credit card debt ensuring that everyone gets just what they want, you will want to go easy the Christmas before bankruptcy.  In the forms that are required by the bankruptcy code, there is a requirement that you list any gifts made to a family member of more than $200.00 or more than $100.00 to a charitable organization.  Giving cash or items to a charity is generally not a problem so long as you don’t go over 15% of your gross income during the year in which the contributions were made.  The reason behind the restrictions is that congress did not want potential debtors to squander their assets in an attempt to hide them from their creditors before filing a bankruptcy.  If you did give a bunch of gifts to family members this Christmas, it may be best to wait until next year to file.  Your best bet if this situation applies to you is to contact a local bankruptcy attorney and ask their advice.

Gift receiving and bankruptcy:

What really matters here is what was given and is it an exempt asset.  If you received cash for Christmas, that cash gift could push you over the income threshold between a chapter 7 bankruptcy and a chapter 13 bankruptcy if you were already close.  If instead you received a car or a new mac book, those are items which would need to be listed.  What happens next depends on the value of the assets and the exemptions available.  If you have enough exemptions available, you will not have anything to worry about.  If on the other hand there are not enough exemptions to protect the new assets, a chapter 7 trustee may take them, or you may be pushed into a chapter 13 bankruptcy.  Again, you would want to talk to a local bankruptcy attorney to make sure that this will not be an issue in your case.

Best of Luck,

Steven M. Palmer, Esq.
Licensed in WA and OH
http://www.curtislaw-pllc.com
http://www.northwestbankruptcyattorneys.com

Advertisements

2 thoughts on “The Christmas before Bankruptcy

  1. Pingback: Northwestbankruptcyattorneys Blog Year End Review | northwestbankruptcyattorneys.com

  2. Pingback: Northwest Bankruptcy Attorneys Blog Year End Review - Curtis & Casteel, PLLC

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s