My mom is filing for bankruptcy....?

Question

ok, so im 20 and live on my own with my 16yr old brother. my mom is filing 4 bankruptcy cuz she has like 25,000 in debt & will never get out from under it...she looked at all possibilities and this is it...my question tho is this....
my mom has a really nice time share & some other assets like cars etc...would it be in her best interest 2 sign them over 2 me so that filing bankruptcy wont effect/take away those things?
& also my brother lives with me cuz its better here for him, mom lives in st louis & he hated it...she takes care of him financially, so its not a big deal on my part....but the thing is that she recieves goverment checks 4 him cuz our dad worked 4 the state & he passed away due 2 the job...so she still gets checks for him, but gives them 2 me...shuld she call the state and tell them that even tho the money goes 2 him still, she shuld have it signed over 2 me? cuz i think the check reflects her income, even tho "technically" its not her income when she gives it to me?

Answer 1

It sounds like with your living situation your mom should be okay. I would not worry about it too much. Here are some of the answers:

NO, definitely do not sign over the car..that would look and have bad results when she filed.. they look at it like she was trying to get rid of stuff so she could say it wasn't hers... Her timeshare may or may not be a risk...she will need to see her attorney on this. I do not know what your state's exemptions are. If she does lose the timeshare, I'm sure she would rather have a home than a timeshare... If she is struggling financially, I doubt she gets to take many vacations. Alas, have her talk to her attorney about her exemptions.

If the money goes into her account, she needs to disclose, but all she has to do is explain that the money goes directly to her son. In all reality if the money is for the son, it belongs to the son. It would only count towards her income and expenses if she touches it. I would not worry about your bro losing the money or his payments.

Continuing your above question, the money goes into her bank account ( which would be income on Schedule I ) and then she would show it as "support of additional dependants not living at home" ( expense on Schedule J ). I would make sure that the income was stated on the "other" line as "Son's monthly income from death of father". This should remove any other concerns the Trustee may have about the money.

So it looks like eveything is going to be okay..in summary, leave everything the way it is.... soemtimes changing the way things always are right before something like this just draws unnecessary suspicion.

Mad Kudos on supporting your brother. It is very honorable. It must be difficult... Wish you and Your Brother the Best....

Answer 2

I was on the same situation and this site helped me CREDITVAULT.NET- RE Should my mom file for bankruptcy? My mom is thinking of filing for bankruptcy. Two years ago she helped my uncle buy a house. He cant make payments anymore and he is leaving it. His house is under my moms name and she is afraid that it is going to mess up her credit. Also my mom has a lot of credit card debt. She said she can pay most of it, but doesn't want to if my uncles house is going to mess up her credit. Should she file for bankruptcy? Is it true that it is better to max out your credit cards before filing for bankruptrcy

Answer 3

Well it would be in her best interest to sell those things to pay off her debt. Signing them over to you is like you owning them and if that happens, sell them. She will then take advantage of you and that is not a road you want to go down. Its her debt, let her take care of it. If tables were turned wouldn't she make you pay your won debt. Don't hide assests from the government, cause that is what she wants to do. Have her sell that time share...pay the debt and come clean. See I filed and if I had something like that in my portfolio I would sell the damn thing to pay the debt. Bankruptcy sticks with you for life...she wants to buy a new car or a new home or even get a simple loan, the bankruptcy will be there reminding her of her failure to come clean and pay the debt.
Sorry I had to be harsh but thats what is in store for her. They take away everything and she will still have that bankruptcy in her past.
Good Luck!!

Answer 4

Honestly, $25,000 in debt is not worth filing bankruptcy. There are always other options. She should sit down with a budget, and figure what things are the most necessary for living. Cancel cable. It's not a life necessity. It's a pain to be without it, but it will be more of a pain when she files bankruptcy and ruins her credit for the next 10 years. If she owns a time share, she can sell it, and use the proceeds to put towards her debt. If she has more than one car (above you said cars, as in multiple vehicles) she can sell one of them and use that money towards her debt. It seems to me that she is living slightly above her income level. She should really consider going to a credit counselor or buying Dave Ramsey's books. He gives outstanding advise.
I think it's great that you help take care of your brother, but being that he's 16 she is legally responsible for him. Who claims him on their income tax, you or your mother? She may consider assigning guardianship to you with the social security administration (I'm assuming that's the income your brother gets from dad) so the checks go to you to help your brother instead of her.
I know 25,000 in debt sounds like a like, but it's really not worth destroying her credit by filing bankruptcy. Whatever debt she has, she needs to pay something towards every month with whatever income she has. If she would like some help, I'm not a credit counselor or a finacial planner, but I have a lot of experience being broke, and trying to squeeze pennies to pay off debts, and she would be more than welcome to e-mail me. Good luck

Answer 5

Signing assets over to someone in anticipation of filing bankrupcy would be fraud, and could get her in much more trouble than she's already in.

If she has decent equity in the time share, why doesn't she just sell it to pay off her debts? And does she really need carS? Or just one to get around?

Under the new bankrupcy laws, if she has assets that would allow her to pay off her debts, the debts do not typically get erased.

Answer 6

That's a great idea if your mom wants to do some time. It's called a fraudulent conveyance.

Come to think of it this whole question looks like a fable.

Answer 7

Your mother could like start a little business like a flour shop and
go paying a long the way .