Tip of the day

Tip of the day

Here is a common situation that has caused problems for many people filing bankruptcy. When you are struggling financially, it is not uncommon to turn to friends or family members for help with emergencies or just to put food on the table. You may have borrowed money from a relative or business associate with the intention of paying them back when you get your tax refund. If you end up filing bankruptcy anytime within the next year after you pay the loan back, the bankruptcy trustee has the right to insist that the family member you paid turn the money over to the trustee. That is obviously not what you intended to happen. If you get your tax refund shortly before filing bankruptcy, don’t spend it by paying back a loan to a family member. You need to explain to the family member that it won’t do any good to pay them right now because the trustee will come after them and make them pay the money back. It is better to spend the money on rent, living expenses or to catching up the mortgage or car payment. You can pay back the relative after the bankruptcy if filed.

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