Legal Question in Bankruptcy in Wisconsin

my wife have about 40,000 dollars that was put into our account by our son for our grandkids. this was done for tax reasons as we are both over 75.If we file chapter 13 will this money come into play and if we cash in the moner and gift it to the grandkids just prior to filine chapter 13 will it still come into play

thanks


Asked on 9/18/10, 1:52 pm

1 Answer from Attorneys

JAY Nixon nixon law offices

No matter what you do with the money, there may be profound consequences during your bankruptcy. If you make gifts to relatives within a year of filing bankruptcy, the trustee can sue the relatives to recover them. That period can be extended to up to four years in some circumstances. My advice is that you immediately retain experienced bankruptcy counsel to come up with a plan before you file any type of bankruptcy. From your description, it appears that this money may not even be yours but rather something belonging to the children which you were given to hold in trust for them. If true (and if properly disclosed and documented), this could solve many potential problems. If it is indeed your money and not the children�s, you would need to declare as much as possible of it as exempt, which, in bankruptcy, allows you to retain any eligible asset. Any amounts exceeding available exemptions would need to be paid to creditors during your chapter 13 plan. My comments here are not legal advice, nor do they create an attorney client relationship between us. However, you are welcome to contact my office to discuss retaining me or to set up a free initial consultation at my office in Racine.

Read more
Answered on 9/25/10, 5:21 am


Related Questions & Answers

More Bankruptcy Law questions and answers in Wisconsin