Question about spending money b-4 filing + more

[momofmany]

I wasn't sure if it was better to just ask several questions in one thread, or make new ones for each question. I decided to combine into one post, please let me know if I shouldn't have!!

I have a question(or two). We made the decision to file Ch. 13(aren't eligible to file Ch. 7 until April 2008). We stopped using our credit cards. We are not paying the credit card companies or the vehicle loan company(we are $20,000 upside down and do not wish to keep the truck).

So since we aren't paying those debts, I was hoping it would be ok that we save up maybe $2,000 to buy a used mini van to replace the truck we will eventually lose. Then what? Can we also save up for the lawyer's fees?? I'm definately assuming we will have to be frugal during the Ch. 13, so it seems like it would be good to start now, but if we have to give an expense list....would it be best to buy what we normally buy(as far as groceries, clothes, etc.) for the next few months and then become more frugal or start being more frugal now? As far as clothes go, we already shop at garage sales and thrift stores...undies are about the only thing we buy new....do we continue with this or try to buy some new things so we have a clothing budget?? I don't want to be "wrong", but I don't want to get screwed over with not having enough $$ for things either.

Anyone know if the trustee actually looks at what you've spent for the months before filing(like do you have to prove you use X dollars in groceries/month), or is a guestimate? On the advice of some others on here, we realize since we've lived on credit for so long, we don't even know what our budget would be for clothing, groceries, etc.

Ok, onto bank accounts. We had a checking/savings and credit card through a credit union that was local to where we used to live. Being that I didn't know if it would be difficult to get an account after filing, and if we are filing BK and the credit union's c/c is on there, then we probably can't/shouldn't have a bank account with them anymore, we opened up a checking/savings that is local to where we live now. We didn't close the original account(and don't plan to). I am wondering is it safe to keep money in the new bank?? As far as anyone being able to take it??

I've heard it recommended to have cash in envelopes and then you have one for groceries/gas/mortgage/etc. I guess. Is it best in the pre-filing stage to pay normally with checks and then after it's filed go to using cash??(I think the point with the cash is once it's gone you don't spend anymore or something like that).

I'm sure more questions will come up, but this is what is on my mind right now. Thanks so much for reading this. Sara

[CindyLou]

Question: Why aren't you eligible until april 08 for chp 7?

[DeadManCrawling]

I can answer one question, and offer suggestions on another.

You did the right thing by opening that new bank account. The creit union has the right to seize any money you have in their account, so a new account was a necessity. Make sure you don't let any funds hit the credit union account. No one can take funds from your new account, as long as you don't owe the new bank any money, without first getting a court orde. You would be notified of any court action in advance, which would give you time to file or delay the proceeding.

As far as purchases-here's what my attorney said. There IS some room for movement, and 2k saved and spent on a new van likely would not be a problem. What state are you in? You can probably cover it with one exemption or another. Expenses are typically looked at if they are "unreasonable", a vague definition that changes from state to state and even among individual trustees.

In our case, we have spent about 15k so far of 35k in money that is all a one-time, bizarre occurrence, and won't be happening again. As soon as we are finished, we will wait to file for as long as possible. Some of our purchases are-a new a/c unit to replace a broken one. Dental and medical expenses that we have long neglected to pay cc minimums. New freezer in garage to replace a broken one. Vehicle repairs. Eyeglasses. Stocked up on groceries, especially canned goods and frozen items. My get back surgery done.

See the theme? All are vital necessities, no plasma tv's or vacations. The money we are spending, like you, would not make even a small dent in our debt. Just make sure you spend any other excess on the things that count and keep all receipts.

It is a relief to know that we actually CAN live properly, once we have not paid our cc bills.

We didn't have any sort of "plan" prior to this, just a heated effort to pay CC bills, no matter what. So, we couldn't really come up with a list of expenses that made sense. Now that we are no longer paying, and haven't for a month and a half or so, we can start to compile that expense list for the attorney.

best wishes,

-dmc

[momofmany]

Question: Why aren't you eligible until april 08 for chp 7?

Because, unfortunately we filed Ch. 7 in April 00. Sara

[momofmany]

I can answer one question, and offer suggestions on another.

As far as purchases-here's what my attorney said. There IS some room for movement, and 2k saved and spent on a new van likely would not be a problem. What state are you in? You can probably cover it with one exemption or another. Expenses are typically looked at if they are "unreasonable", a vague definition that changes from state to state and even among individual trustees.

It is a relief to know that we actually CAN live properly, once we have not paid our cc bills.

best wishes,

-dmc

Thanks for the support. We are in Minnesota, so we have the option to either use the state's exemptions or the Federal. From one attorney's website I was on, they said that both spouses when filing joint(which we would be), are eligible to have a vehicle. The vehicle can only be worth like $3,000 something with federal, and my husband's car should be below that, and the van if we got one, would probably be around $2,000 So hopefully that should all work out!!

Thanks!! Sara