I see people every day who get into financial trouble when dealing with family. One problem involves paying back loans from family before filing for bankruptcy. The second consists of giving loans or paying bills for family. I’ll talk about each of these two problems below.
You may want to pay back family member for a loan. The payment often come from tax refund. But paying family back before bankruptcy causes a problem. The law allows the bankruptcy trustee to sue any family member who received $600 or more loan payback or more during the last 12 months. Avoiding this problem is simple. Pay back the loan after you file bankruptcy. Not before.
Another common problem is helping family. Parents help children, girl friends help boy friends, adult children help parents. Lending money or paying debts for family are one way to get in trouble. Another is to let someone use your credit card. I estimate that one out of five of my clients get into financial trouble as a result of helping family. The worst part is that people ruin their credit as a result. The person who tries to help ends up filing a bankruptcy. Don’t extend your credit to family because it can cause a problem for you later. You have to learn to say no.
If these problems sound familiar, call me. I may be able to help you. To schedule a no obligation consultation, call (559)222-4891