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Please help!Fraudulent Transfer Confusion
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Posted by Worried Sick Mom
(69.162.235.158) on February 04, 2004 at 20:27:20:
Where to begin? Had very low income from a survivor annuity(husband passed away several years ago,our son was 10 at the time)Annuity {our only income}ended in 02 and I fell into a lot of credit card debt with several c.c companies.I stopped making payments when 2 had large balances{12,000each} 3 {around 3000 each}and several more at around 1500 each.The total debt was probably around forty thous. and because of late fees and huge int. is probably now around 55,000.I have basically ignored creditor calls and letters for 2 yrs because I had no money to pay them and I have no job skills.Last year I was forced to sell our home because we needed money to live on.House and used car only assets. {my 20 yr old son is in school)The money for the sale of the house was wired to my checking acct.(110,000) Now about why I have been sick with worry. I have a handsome smart college honor student son I am hoping I did not get involved in something considered illegal.The money I received for the house was in my checking acct which was paying 0% interest.I wanted to remove this money from this account so it could draw some interest.I wanted to give my son half of what I received for the house and to also pay him back for lending me 20000 from a 25000 inheritance of his that I used to pay our living expenses with in 02 and 03(total 75,000).I was either a complete idiot at the time or just naďve but I had no idea that the law says that you cannot give your child money when you are in debt!This is considered”fraudulent”(Please tell me I have not gotten my child who has such wonderful prospects into trouble)I absolutely adore him,he hasn’t a mean bone in his body.He never would have accepted the money from me if he knew it was considered fraudulent.My intention was to pay my son his 75,000 and to also take my 35,000 and invest it for me in joint cds.I wanted to remove nearly all of the money in my 0% check.acct.I moved around 108,000 to my sons checking account by writing him several personal checks over an 8 week period.IMPORTANT:this is another reason I am worried sick.At the time I wrote my son several smaller checks instead of one big one was just an innocent stupidity on my part.I was under the impression that you are not supposed to write very large sum personal checks over 10,000(now I have learned that this is not true)Does this make something that was done out of innocent stupidity look suspicious.I don’t know whether I am thinking straight about this am I right to be sick with worry or am I making mountains out of molehills.After moving nearly all of the money from the house sale to my sons checking acct. he used his 75,000 to buy himself 2 year CDs.My intention was to have him use my 35,000 to buy joint 6 month CDs but I changed my mind when I found out the int.paid on these was only around 1% and it was not worth tying up my money for such puny interest so my son returned the 35,000 to me and I put it back in my 0% checking acct. I realized I was going to need this money readily available anyway because it is all I have to live on.So the money I was so eager to move out of my 0% acct remains there(my portion,anyway).As you can see I am not very good at handling money.I hope whoever is patient and kind enough to read this understands what I am saying.After giving my son his 75,000 and my 35,000 and him returning my 35,000(confusing isn’t it)I read about something online called fraudulent transfer or fraudulent conveyance.As I said before I had No idea that you cannot give money,even to your child,if you are in debt.I have been physically ill from worry thinking I have gotten my child into trouble.My debt situation is a mess.I cannot even remember how many companies I am in debt to. I have ignored letters and calls and I know that I could be or maybe already have been sued.I know I should have been more responsible but I am a very sick and troubled person.i have a very severe social phobia and I have a chronic disease with no medical insurance.If I had known that it was considered fraudulent to give your child money while you were in debt I NEVER would have gotten him involved in MY mess.My main concern is protecting my son from harm because of my stupidity.Have I mis interpreted the fraudulent transfer laws .Could he or I be charged criminally.am I being paranoid or is this as serious as I think.What should my next step or steps be to keep this from harming my son..I am afraid that if I consult an attorney they may not recommend the best thing to do and it would do more harm than good. Would we be accused of fraudulent transfer by a credit card company? Would they go that far?
I sold the house in Pennsylvania and have since moved to Virginia.My late husband and I purchased the house jointly wros and intended our son to inherit it but because I have no job or other assets I was forced to sell it.This is why I believe my son deserves at least half of the money from the house.When my son accepted the checks I wrote him he understood that I was giving them to him for half the house money plus the loan from his inheritance and my portion was to be used to buy joint CDs.He has no idea how dire my debt situation is.He was just being a good son and doing as I told him to do.I would be devastated if anyone were to accuse him of helping me “hide” money.
Would a good solution be to tell my son about all of this and see if he would return some money to me or would this do more harm than good and make us appear even more “suspicious”.When I gave the 108,000 to him I was around 55,000 in debt.Does this mean that only 53,000 could be called fraudulent and when he gave me back my 35,000,
Now only 18,000 of his can be called fraudulent.SO CONFUSING! HELP ME understand how to fix this mess PLEASE.
ANY answers,comments,advice,suggestions will be greatly appreciated Thankyou for reading my ramblings. Worried Sick Mom
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