Is it a bad idea to deposit a large amount from a family loan within a week or so of filing Chapter 7?
I would be using this money to try and start generating income (since I currently have none).
Will the Trustee try to take this?
Depositing a large amount of money in your bank account right after filing a bankruptcy case is not a good idea because it will draw a lot of questions from the bankruptcy trustee, who can ask for your bank statements from before and during the bankruptcy case. If you think you need to get a "loan" from family members to help you get back on your fee, it's probably a good idea to wait until after the bankruptcy case is concluded. On the other hand, small amounts of money, for the purpose of helping you pay your monthly living expenses, is probably OK.
If you are planning on filing a chapter 7 bankruptcy, start by talking to a bankruptcy attorney in your area. Most bankruptcy attorneys offer FREE consultations!
This answer is for general information purposes only and is not legal advice. No attorney-client relationship is intended or formed by the posting of this answer. Law Office of Lisa J. Espada * San Francisco, CA *
There is no restriction on borrowing from family after your chapter 7 petition is filed. You should document the transaction in case the chapter 7 trustee requests copies of your bank statements and inquires about the source of the funds.
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That said: On the day your bankruptcy petition is filed, a "financial snapshot" is generated to show the trustee what are your assets and debts. Money you earn or receive after you file is not likely to draw the attention of the trustee, unless it was money owed to you before you filed, for example, you filed a lawsuit years earlier which settled and you received the settlement after you filed. It depends on the genesis of the money. From your statement, it sounds like your family is helping you get back on your financial feet going forward and has no pre-filing connection.
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I would recommend waiting until after the 341 hearing to eliminate questions from the Trustee and also draft up a note showing the amount borrowed and the re-payment terms.
Money from a loan after bankruptcy would not be considered property of the estate. However, may raise some questions by the Chapter 7 Trustee. May be a good idea to wait a bit if you can.
If my answer is "BEST ANSWER" and/or "HELPFUL" please acknowledge and mark it so. I appreciate your comments and feedback. I have more than 25 years of successful legal experience with cases like yours. My response is often general in nature because all facts are unknown to me. Specific answers require knowledge of all the relevant facts of your case.
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