Lawyer says no checking accounts or debit cards

[lrprn]

They said to stop my direct deposit form my job and to use money orders or cash to pay the bills.

Again, your lawyer is trying to protect your cash from being seized by the trustee because depending on when you file, automatic deposits could push your cash over what can be protected by MO exemptions on filing day.

There have been cases where paychecks were automatically deposited and checks written against the account that had not cleared making the amount of cash over what was allowed by exemptions on filing day. The trustee went after that unprotected cash even though the checks had already been sent out, and the trustee was able to take all the cash over what was protected. The checks bounced when they finally cleared or the trustee went after the payment to the creditor and demanded it be returned because the check was cashed after filing. This is what your lawyer is trying to protect you from happening.

When there's such a small amount of cash allowed on filing day, careful planning to set the filing date so your accounts will be below what's allowed on filing day is crucial. This is why money orders or paying in cash in person are recommended in the month before filing. Money orders clear the account quickly, where personal checks could take weeks to clear.

[keepinitreal]

Again, your lawyer is trying to protect your cash from being seized by the trustee because depending on when you file, automatic deposits could push your cash over what can be protected by MO exemptions on filing day.

There have been cases where paychecks were automatically deposited and checks written against the account that had not cleared making the amount of cash over what was allowed by exemptions on filing day. The trustee went after that unprotected cash even though the checks had already been sent out, and the trustee was able to take all the cash over what was protected. The checks bounced when they finally cleared or the trustee went after the payment to the creditor and demanded it be returned because the check was cashed after filing. This is what your lawyer is trying to protect you from happening.

When there's such a small amount of cash allowed on filing day, careful planning to set the filing date so your accounts will be below what's allowed on filing day is crucial. This is why money orders or paying in cash in person are recommended in the month before filing. Money orders clear the account quickly, where personal checks could take weeks to clear.

I second the recommendation to pay in money orders or cash in the month before filing.

We paid a bill on-line 7 days before we filed and it still hadn't cleared our checking account on filing day.

[Pandora]

While I agree with keeping the funds low in your account - your lawyer should have all information of pay days prior to filing, so there should be no reason to cancel any account or direct deposit. Keep the checking account, keep the direct deposit - and take the monies OUT of your account - putting it into pre-paid cards to pay bills if necessary.

It takes quite a long time to open another account - get checks ordered with a new account number - re-establish your debit card limit for purchases / cash advances, etc - then it does to just keep the account open, not to mention the cost of new checks. For those that are wondering - yes there actually IS a limit on debit cards - it goes hand in hand with the average monthly balance in your account as well as how long you've had your account. When we first opened our 2nd account, our debit limit was $500 a day in bill paying and $300 in cash advances. We are now authorized $3K for debits daily and $1000 for cash advance, which helps tremendously given we pay all our bills online or use our debit card 90% of the time vs. writing a check. So - it does matter.

Just withdraw the monies and ensure your lawyer knows WHEN your pay day is - then file before you get paid, keeping an eye on the balance. It really is that simple.

[Guest123]

We just opened another bank account and it doesn't take long at all, we had checks when we walked out of the office.
We just stopped our automatic deposit from our old bank and needed to get a new bank because we had loans the would auto deduct. Just an easy way to so we don't have to deal with it later.
We will use pre-paid, money orders, and cash until we are set into the plan then will go back to billpay and checks.

[Pandora]

We just opened another bank account and it doesn't take long at all, we had checks when we walked out of the office.

Were they starter checks with a start number less than 1000? If you walked out with checks the day you opened your account, chances are they were starters. MANY places will not take starter checks nor checks numbered below 1000 (at least where I am thats the case).

[Guest123]

Were they starter checks with a start number less than 1000? If you walked out with checks the day you opened your account, chances are they were starters. MANY places will not take starter checks nor checks numbered below 1000 (at least where I am thats the case).

They are starter checks. And there are not MANY places that will not take them. Most of the places that are common for people to use checks like rent and/or utilities they are welcomed.
Besides it takes less then a week for debit cards and regular checks to arrive, still not a long time to open a new account.

[Pandora]

They are starter checks. And there are not MANY places that will not take them. Most of the places that are common for people to use checks like rent and/or utilities they are welcomed.
Besides it takes less then a week for debit cards and regular checks to arrive, still not a long time to open a new account.

Maybe not in AZ - but here in VA where I'm at - its rare to have anyone take a starter check. I'm glad you were able to open your account and get your items quickly but I've never had a debit card come in a week - usually its about 2-3 weeks on average. Perhaps it depends on the bank (big vs. small / credit union) as to timeframe.

Bottom line is it is not necessary to close an account down and stop direct deposits because you are filing BK; there are ways around it that are proven to be effective in accomplishing the same thing without giving up your limits and/or starting over.

[Guest123]

Maybe not in AZ - but here in VA where I'm at - its rare to have anyone take a starter check. I'm glad you were able to open your account and get your items quickly but I've never had a debit card come in a week - usually its about 2-3 weeks on average. Perhaps it depends on the bank (big vs. small / credit union) as to timeframe.

Bottom line is it is not necessary to close an account down and stop direct deposits because you are filing BK; there are ways around it that are proven to be effective in accomplishing the same thing without giving up your limits and/or starting over.

Usually places that will reject a starter check are stores, they are rarely if at all rejected when mailed to pay for utilities or loans. I don't know many that will even go shopping with checks anymore.
I never had an account that took longer then a week to get me my new card or replace a loss/stolen one.
I still wouldn't say it is not necessary to close an account. In our situation it was the best option. We have 2 loans that will auto deduct the monthly payment, by closing the account we will not over draw the bank account. We stopped paying this month and are looking to file the end of next month or middle of Dec.
And opening a new account didn't effect any limits and no ill effects from starting over. Their might have been ways around it but they would not have been easier then opening another account.
Just way to easy to start over with a new bank that you didn't have a prior relationship with then to try to keep one you have now. Lot of risks to keeping direct deposit, and staying with a bank that will be included in the bankruptcy.

[Pandora]

Usually places that will reject a starter check are stores, they are rarely if at all rejected when mailed to pay for utilities or loans. I don't know many that will even go shopping with checks anymore.
I never had an account that took longer then a week to get me my new card or replace a loss/stolen one.
I still wouldn't say it is not necessary to close an account. In our situation it was the best option. We have 2 loans that will auto deduct the monthly payment, by closing the account we will not over draw the bank account. We stopped paying this month and are looking to file the end of next month or middle of Dec.
And opening a new account didn't effect any limits and no ill effects from starting over. Their might have been ways around it but they would not have been easier then opening another account.
Just way to easy to start over with a new bank that you didn't have a prior relationship with then to try to keep one you have now. Lot of risks to keeping direct deposit, and staying with a bank that will be included in the bankruptcy.

Again, as with everything - your mileage may vary. If closing your account and starting over worked in your favor, then thats great. My point in posting was that it is not necessary if you have a very diligent lawyer and you yourself are diligent in keeping track of your account prior to filing and the 341.

[Guest123]

Again, as with everything - your mileage may vary. If closing your account and starting over worked in your favor, then thats great. My point in posting was that it is not necessary if you have a very diligent lawyer and you yourself are diligent in keeping track of your account prior to filing and the 341.

I'd agree to disagree but being diligent has nothing to do with it.
So as you said eveyones situation might be different so in no way can one state it is unnecessary to close one account and open another. Because certain situations can not be helped no matter how hard working you or your lawyer is. Any wy work harder when there are smarter and easier ways to do things when dealing with a stressful BK?

[Pandora]

Uhm... okayyyyy. Is there a particular reason why you're so argumentative or something? You seem hell bent on justifying your position to "be right". Close the account or dont - doesnt matter to me in all honesty. My original post was not just for the OP - it was for anyone reading that may believe they must close down their accounts when it comes down to filing BK. My subsequent posts where you come into play was merely a conversation reiterating my original post. In the end, its a personal choice only - not a required one in order to file BK. Call it as you will... lawyers are lawyers whether they graduate top of the class or bottom -they all get the degree. Doesnt mean every lawyer is diligent and up to par on BK.

I have nothing more to add or say at this juncture, other than I'm not quite sure why you're so fixated on my post and additional chats with you. ??

Have a good day

[0inthebank]

Our paralegal told us to keep our balance low as well - $1K or lower to protect money being taken away by the trustee. We were told that $1K was a "safe" amount to keep in bank accounts in California. I called our lawyer's office and made them aware that our balance was really low and that they should file before our pay day. That didn't happen. We received our 341 meeting notice and it turns out, it was actually filed on pay day. Our beginning balance was $1800, but bills also cleared that day bringing the ending balance to $1300. If anything, it makes me wonder if they would go after the $800 or the $300. Also, does anyone know if balances should still be kept low after the 341 meeting?