Ways to pay a debt back

[manros]

Is there any effective way to pay back a loan (98 thousand dollars) and keep it under the radar? There is no wrongdoing with this personal debt. But my friend, a privacy nut, does not want to use FRNs- this is the only way I know to keep these things very private.

What would be the most discreet method of payment if not cash? He does not like the gov. and/or others to intrude... He also told me that he would need to justify taking that amount of cash out of his own bank account-tax free capital gains were deposited into this account.

I told him he could write a personal check to pay his debt to an individual (a common friend) since it has enough money in it. He said the people from Homeland Security would like to know more about their lives.... No matter if nothing wrong is done.

Is he paranoid? He is a hard working, noble man.

[Smith]

Easy enough ...

Find out what amount you can pay by check that is below Homeland securities radar and make payments .

Just an Idea not legal advice ....

[Shoonra]

First, this must be some friend to have lent you 98 Grand (or maybe it was less with significant interest?).

Second, the currency laws do require the banks to inform the govt of transfers in excess of a certain amount (about ten years ago it was $10Gs). I would not be surprised if the govt either lower that threshhold or simply could spy on transactions of any amount.

If your friend will accept payment in installments - but within a short span of time - give him money orders or cashiers checks for roughly $8G or $9Gs every few days. You could make them payable to "Cash". For this you have to judge how honest your friend is, because you won't have regular receipts unless you insist. I suggest against round numbers -- looks too much like a drug deal -- every such check for a slightly different amount.

Even if this gets by the currency laws, somehow the govt may get wind of you handling large sums of money within a short span of time. The govt may wonder if you're hiding assets or dealing drugs. The day may come when they might ask you.

[palani]

Accord and satisfaction.

Use your imagination.

[macerico]

1. It would help to know the nature of the loan. Given the amount, I would suspect college loans or mortgage.

2. It would also help to know why, if he has the FRNs to pay the debt off, he doesn't just do it. After all, there is nothing suspicious about paying off a debt already listed under your own identity. The only guess I have from what you've shared is that much of his FRNs are already earned "off the grid" and paying off the debt would be a potential red flag. I'm not sure if that's an accurate assumption since if he has those FRNs in a bank, they are already being tracked and traced and that's as big a flag to the IRS and it is to anyone.

3. The most discrete way is for a third party to submit a money order to be applied toward the account in question. This can be done by your friend without involving third parties.

He can use FRNs with no real problem since the receiving party does not care what was used to buy the money order...they only care that the money order is good. Money orders (Western Union for example) are issued for less than a maximum amount with no questions asked at many retail locations. Since illegals use this "underground economy" like there's no tomorrow and neither the IRS nor Homeland Security/Gestapo lift a finger to investigate what goes on, the ONLY PROBLEM is doing too much business in one place or one time. Most places will let you do two maxed out money orders with no questions if you come in on rare occasion (big purchases are not unusual). If you did 4-5 maxed money orders every week, they'd probably get suspicious, but HERE'S THE GOOD NEWS...there are tons of these retail locations. You could get 10 maxed out money orders by just going around town and doing one at each location once a month.

3. The final issue deals with (a) where does his "money" come from and (b) what will the receiver think if a lump-sum payment shows up.

I'll answer the second question first. As a rule, all a creditor cares about is being paid. If someone dies and leaves you a ton of "money," you can pay off all debts real fast with no problems. However, in our Gestapo society, maybe it would still get reported as suspicious, and then the question comes down to, "Where did the 'money' come from?" If large payments are sent every month, this might stay under the radar. A lump sum would likely arouse suspicion.

Now, the first question might solve the second question. If one was to set up a "sham" charity, or some other legal 3rd party (LLC/Corporation) that has a charitable goal and have the proper "sham" papers drawn up (all legal but done just to create a needed paper trail should anyone ask questions), that "sham" entity could assume the debt, pay it off, and hopefully KO any inquiry at its mailbox. It would put a name and face to the source of the "money" paying off the debt and eliminate most any suspicion the recipient might have.

Hope that helps. It would really be useful to more understand where his concerns are rooted.

As I said, if he has the FRNs in a bank, the money is already being traced, and there is nothing suspicious about paying a debt already in his name with his own money. Lump-sum payoffs are totally legal and are not suspicious as many people have the money to pay off a debt but would rather have the bulk of their savings making money in the markets at a higher interest rate than the interest rate on the debt they are paying off.

[manros]

You are all really inspiring me.

My friend had the money as a result of "capital gains" over the sale of his house. The money is clean and he can do with it whatever he wants.

His concern is caused by the fact that this money was given to him privately and in cash some years ago. The generous and trusty friend wants it in the same way. This is what they call a Private Contract between 2 individuals. In theory, we are all entittled to it.

My friend says the gov. will look into a big check if he gives it to his friend (no matter how legit). He is a privacy check and almost paranoid. On the other hand, he is a sensible and prudent man. But I wonder if he has a real point for his fears or not. If it were me I just would write a check for the due amount.

[macerico]

If all the money he has is "clean." Fine.

It sounds like he's gotten some FRNs in private transactions that were not reported as "income" to the IRS gestapo.

Nonetheless, he put all his FRNs in a bank which is nothing but a way for the IRS to locate and track all your FRNs.

I think he has nothing to be concerned about. If the FRNs in his account will cover the debt, nothing should come of making a lump-sum payoff...especially if something like the sale of a home would explain the mass of liquidated assets.

Unless he's concealing his capital gains and hoping the IRS doesn't find out, nothing will be realized by being secretive about the matter. His assets are already being tracked or are trackable at will. If he was hoping to keep something concealed from tracking in our monetary system, he would have had to never put the money into a banking institution.

EDIT....

Man A gives Man B cash for house in private transaction. Reporting requirements for sale is on Man A who must record the deed. I believe Man B has IRS reporting requirement but only to the IRS. Man A reports the amount to the deed records office which assess a transfer tax on the property.

If the transaction was paid via cash but no misrepresentation is made as to the amount of the transaction, there is nothing to worry about here. It is nobody's business if a house was bought via bank check backed by a loan or cash on the barrel silver and gold coin or a truckload of goats. There is no duty to disclose who actually bought or sold property outside of what gets put on the deed to be recorded. The seller must be identified to match the existing valid deed. The buyer can be anyone (even a business, for identity protection purposes).

I think he's being unduly paranoid...unless someone misrepresented how much was actually paid for the property.

[gldskr]

Another question arises in that; was the sale of the house facilitated by a realtor? If so the realtor will report the sale to the IRS and if a 1040 is filed capital gains tax will have to be paid.

Otherwise there should be no problem transferring the funds. Withdraw the funds in cash and transfer the cash to the third party. The third party is insulated from the bank transaction.

gldskr

[Madeline]

I haven't even read the rest of this thread, but I can tell you what is mentioned below is about the WORST possible thing you could do.

They are much more likely to look at multiple regular smaller transactions as far as money laundering. If it was a loan and they did an agreement, there should be no problem.

I have had various $100K plus transactions using an attorney's IOLTA account as a middle man and never once been questioned on any of them. The most recent of these being within the last year.

Originally Posted by Shoonra

First, this must be some friend to have lent you 98 Grand (or maybe it was less with significant interest?).

If your friend will accept payment in installments - but within a short span of time - give him money orders or cashiers checks for roughly $8G or $9Gs every few days. You could make them payable to "Cash". For this you have to judge how honest your friend is, because you won't have regular receipts unless you insist. I suggest against round numbers -- looks too much like a drug deal -- every such check for a slightly different amount.

[manros]

Madeline, should he procure the help of an attorney for that kind of account or IOLTA?

On the other hand, I am considering that would be no sin at all if he withdraws all the money cash, since it is "clean" money and they know it.

I called Customer Service and they told me he will need to make arrangements to withdraw the cash in different occasions, since "no bank has that amount of money cash together to be able to give it at once in one single instance"

I feel so bad about this. It is ridiculous that people with legit money, need to be secretive and careful about having it all in cash if they wish.