cash on hand prior to filing

[coopersmydog]

I'm in a bit if a wierd spot. I'm timing my filing so that a bonus I get in march won't count as income on the means test. Well that bonus is going to be a little bigger than expected. I also just Got taxes done and I'm getting a large refund. I need some advise

All totaled I'm goingto have about 7500 dollars on hand in the next two weeks. I have to file before the end of march. In all likely hood well file 13. We will be using federal exemptions if it matters in a 13. We have no equity in our home. I'm hoping I can use the homestead exemption and keep the cash. But I'm not exactly sure how that works. If I can't I could use some help figuring out a plan for the money.

[optimistic1]

You can only use a homestead exemption for the possible equity in your house, not a bonus or tax refund. Im not quite sure about the tax refund, it really is not income, so I dont see how it can be included as so.

What is the reason you HAVE to file in March?

[StartingOver08]

OP, where are you located (State)? Some places allow you to use Federal exemptions. Some allow you a large wildcard and some allow you to use unused homestead exemption to exempt other items (like Fl). So it is important to know which state you are located in and for how long. Go to www.Legalconsumer.com and check your states exemptions.

[coopersmydog]

I already know I can use the federal exemptions, but I'm not sure how cash is handled.

[Trixie007]

We are also filing using the Fed exemptions and we are going to exempt cash as well as an anticipated commission check. Together they are about 8k. If the Trustee tries to push us to a 13 for any reason, we are prepared to let them have that money if it will make a difference! (but we hope we don't have to )

[StartingOver08]

Cash is an asset that needs to be exempted too.

I already know I can use the federal exemptions, but I'm not sure how cash is handled.

Cash is an asset, just like your equity in your car or your house. Only it is the most desirable asset for the Trustee. So you need to specifically exempt the cash in your account the day of filing in order to keep it. Anything over the specific amount in your petition goes to the Trustee. That is why they check the bank balance the date of filing at your 341. I'm in Fl and was told by my attorney to have no more than $100 in cash in my account as of the date of filing (because the Fl exemptions are so small).

[EricaCallaha]

We are in Utah and were told to have no more than $200.00 total in all of our bank accounts. We also have to turn over our tax refund to the trustee. We knew that we were going to have a large refund but were unable to use any exemptions to protect it. Make sure you don't spend anything until your attorney advises you what to do with the money.

Good luck....I hope you get to keep your cash.

[SgtBailey]

Can't tell you the amount, although I've looked around a little. Not sure if 522(d)(5) - ... any property, and unused portion of homestead... counts.

I would think that what ever the amount, you will have to spend any money above the exemption or lose it. As I understand it, you can spend it on "necessities" like roof repair, new furnace, new carpet, car repairs or just drop it in your IRA or 401K.

Good luck.

[indebt00]

I don't know how you are getting to keep cash...wish we could. AZ doesn't have any wildcard expemtions or anything. We have to have our cash in bank lower than $500 for our ch 13.

I don't know what the homestead exemptoin is....we must not have that either. but we are also using fed exemptions.

so if you come up with any ideas on cash disposal...let us know. we are in similar boat.

thanks

[coopersmydog]

anyone else have any thoughts?

[coopersmydog]

Really could use some more input if anyone knows more about this.

[gettingby2008]

I told our lawyer that we would have appx 3K in our account from being able to save. He said it would not be a problem.

[indebt00]

I told our lawyer that we would have appx 3K in our account from being able to save. He said it would not be a problem.

we were told to only have 150...nothing more. so we are on a spending spree at the moment to reduce cash. this is not that easy....as OP is also in the same bind.

to OP...we are buying new mattress set and doing some home repairs (with lawyers ok). we are also thinking of putting cash in IRA....BUT...this means we can't file for 120 days....that is just too long to put up with this.

we paid a few things to get current (stud loans, utils) and were surprised at the chunk of cahs that was. We also had ot pay some of our cc's this month due to spending.

good luck and I am also looking for suggestions...

[strugglingda]

A quick question. How many months' worth bank statements do they check for material withdrawals? If I intend to file say a few months from now and make a sizable cash withdrawal from my account today, will that be a problem?

[aa06a47]

You haven't even filed and are trying to figure out how to screw the pooch so to speak. I like your style! However, if your filing chapter 13 or chapter 7, just relax, deep breaths, and realize that your more than likely going to have to give up that bonus and tax return (in most states). Just release the stress associated with trying to hide it.

Your only other option is to delay your filing, get those sums of money, and purchase items you need, repairs to cars, home, ect. If asked, you should be able to proove you spent the funds on necessary items. I wouldn't use it for a faboulous vacation...ect.

If your serious about getting out of debt by utlizing the bankruptcy process, don't risk dismissal by trying to hide income. You probably have a 50-50 chance of the trustee not finding out about it during the confirmation process, but if the trustee finds out you will be very disappointed.

Future bonuses will probably fly under the radar of the trustee. It is up to you to report them.