I see a lot of people in my office asking about filing bankruptcy. More often than not these days, it’s a realtor or mortgage broker or loan officer who has lost income. Oh, and they have two investment houses and those investments aren’t panning out. As I said, this happens a lot nowadays.
Yesterday, a gentleman who is from the above template strolls in. I’m very sympathetic to his plight. He might have to let two properties go, his wife’s income barely pays the mortgage where they live. At the end of our time together, I ask, “have you sold, given away or transferred any valuable property in the last four years?”
The answer? Yes, I sold a house. How much did you get? $250,000. No, I mean, how much did you clear from the transaction after the mortgages and liens were paid? Same answer: $250,000. Great! And you purchased your current home that same year… how much of that did you put down? Zero down. When did this happen? Less than two years ago: 2006. And where is that quarter-million dollars now? Home improvements. You must have a lot of receipts from Home Depot. The Chapter 7 Trustee will be wanting to see all of them. He looked at me, puzzled.
Who gets a ton of money from selling a house and goes zero down on their new home and can’t show where the gobs of cash went? Is it possible he’s telling the truth? Sure. But if he were to file bankruptcy, you can bet the US Trustee will be all over him.
It’s just amazing to me.
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