384. Bankruptcy in a different year than the discharge

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Episode Transcript

Speaker 1 (00:01):
All right.
Well, it's been two and a half,almost three months since the
last recording.
I figured I'd just update herebecause it's something kind of
in the business acquisitionworld.
But ever since wrapping up thegym and closing things down, we
talked with our CPA and, so glad, hired an expert to do the
business returns, the personalreturns and all that good stuff

(00:23):
and one of the curveballs inthis whole thing we filed
bankruptcy protection.
Well, so we reached out to ourattorney I don't know August,
september, october, I don'tremember but it probably took us
30 days to like get all of ourpapers and ducks in a row so
that we could like even file forchapter seven.
And then after we filed, thatwas in like October I want to

(00:45):
say October or November, can'tremember but then after that you
go through that.
It's an application process.
So we had to file our petition.
We had to see our bankruptcytrustee like saying, hey, here's
our name and info, here's whywe are applying for bankruptcy.
And then she goes back and thenlike reevaluates and then

(01:07):
issues her verdict after so manyhearings, and that verdict was
not given until the January.
And so here's where it allrolls together and why it's a
hiccup and it's not a problembecause it's just a tension to
manage, it's not a problem tosolve.
But we filed for bankruptcy in2024.

(01:29):
Our bankruptcy was notdischarged until 2025.
So when you file, your creditdrops, all the creditors realize
they're probably not going toget paid, and so then that's
where your credit just getssmashed overnight.
But you don't get the financialbenefit of the discharge until
it's discharged by the trustee,which was until 25.

(01:49):
So our CPA is like hey, youlegally filed in 24, but you
didn't get the reward until 25.
So technically, this is goingto impact your returns because
sure, it happened in onecalendar year, but you didn't
get the financial gain orbenefit or upside until the
following year.
So she's saying that, from whatshe understands, we'll do our

(02:11):
normal returns in 24, likenormal, but then our returns in
25 will be different, becausethat's when the financial
benefits were received.
So I don't know, I don't knowhow that's all going to pan out.
Basically, it's middle of Juneand right now our bankruptcy
lawyer and our CPA and thebankruptcy trustee are all on an

(02:31):
email chain and the CPA is likehey, the legal side says this,
however, the taxes say that.
How do you want me to proceedBecause even like right now,
like the trustee said, hey, takeyour refund, have it mailed to
the trustee and not to me, notto Nathan, um, because she gets
like 80% of all the refund value.

(02:53):
But when you file tax returns,the IRS, and like the state,
they just send it to the addresson file.
So, like our home and it looksfraudulent if you say, hey, send
the return to somebody else,not the person who's filing it,
and so it's like our CPA says.
It's not even like logisticallypossible to say, hey, here's

(03:13):
Nathan and here's Nathan andfamily, here's their home
address, but mail the refund tosomebody else and no, this is
not fraud, irs.
And so I don't know.
Cpa doesn't know how to proceed.
Irs says one thing, departmentof Justice says another thing.
I'm going to let the expertsfigure it out.
So I am so glad we have a CPAand a bankruptcy attorney doing

(03:36):
all the communications becausethey get to figure out all the
mess.
So no update as of now.
Um, we have extensions andeverything.
We're basically waiting for thetrustee to tell us.
So that's the learnings If youcan go bankrupt the same year,
that you're going to get thedischarge, if not, then you'll
end up like us and you'll haveto figure it out afterwards.

(03:57):
So, anyhow, life is good, jobsare good, family's good.
Um, we're going to rock androll from there.
That's it.
That's where we're going.
Let's rock and roll.