Many people facing financial problems turn to family to help them through the tough times. Besides the awkwardness inherent in owing money to people you see on holidays, or perhaps daily, there are potential legal consequences to borrowing and paying back your Family. For starters, all of your debt has to be listed when you file for bankruptcy. That includes the money you borrowed from Mom and Dad, or Aunt Ethel. If your relatives are not aware that you are filing for Bankruptcy, they will be after they receive a notice from the Court. Even if you tell them you will pay back the money after your Bankruptcy, including a relative in your petition could result in anger and hurt feelings. Even worse than borrowing money from Family, is paying them back before you file for Bankruptcy. Bankruptcy law requires your relatives to return to the Court money you paid to them within a year of the filing, provided you paid back more than $600. Giving your relatives something you own to pay for the debt is even worse. That kind of debt payment is considered a fraudulent transfer of property if it took place within 2 years of your Bankruptcy. So before you borrow money from Family, consider seeing a Bankruptcy Attorney or Debt Counselor. Maybe a little cash infusion is all you need, more likely, you are just throwing good money after bad and dragging the people you love with you.,
