Question about cash in acct. prior to filing...

[jc4]

Most likely filing this fall and I was wondering about any cash in your acct. prior to filing due to not paying mortgage. Someone said we will want the cash out before filing, but obviously taking cash out with nothing to show for. So, having a stockpile of cash for emergency seems out of the question. Do I purchase upcoming necessities? Do they question the purchases made right before filing?

[drowning123]

They don't as long as they're not extravagant. It's best not to have cash in your account. You will be questioned and your case will be delayed.

[forgotten]

There is no problem having cash in your account when you file if it is exempted. I had $8000 and not a word was said.

Edit: If you do withdraw and spend large amounts of money prior to filing keep receipts. $5,000 for a vacation is not okay, $5000 for home repairs is fine. Car repairs, food, medical procedues/supplies, etc. Anything not a luxury.

[AngelinaCat]

If you do make purchases, buy storable canned goods, and other food items. Don't forget non food items such as toilet paper, paper towels, shampoo, body soap, laundry soap, toothpaste, toothbrushes, etc. Also tuck some money away for Emergencies--they WILL happen, at the least convenient time.

Check with your state exemptions--some states and districts are getting hard-nosed about what they perceive as 'hoarding'. Which is stupid, because Consumer Advocate, Clark Howard, talks all the time about having an Emergency fund of at least $1,000.00 or more to tide a family over. He wants a family of four to have enough supplies and resources to last three months, and laments that most of us Americans cannot do that because we are so much in debt.

And yes, to echo 'forgotten', because I forgot: Keep your receipts. 99% of the time you will not need them, but if you DON'T keep the receipts, the perverse gods will come in and nail you for them.

Good luck to you!

[ValleYum]

It sounds as though the OP is giving up their home. If this is the case since they reside in New Jersey and can use them, the Federal bankruptcy exemption set would help them be able to exempt cash on hand in the bank at the time of filing. The OP can utilize up to $10,825 of the unused homestead exemption to cover any property including cash in the bank.

If the OP is filing a joint bankruptcy all the federal exemptions may be doubled (motor vehicle may be doubled only if each spouse has a vehicle).

The OP's interest up to $3,450 in value in one motor vehicle - remember, this can be doubled only if you and spouse (if filing jointly) each have a vehicle. You can use the wildcard exemption to cover any additional value you need to protect in a vehicle(s).

The OP's interest (not to exceed $550 for any particular item) up to $11,525 in total value, in household furnishings, household goods, clothes, appliances, books, animals, crops, or musical instruments that are used primarily for personal, family, or household. NOTE: Hubby and I used the Federal Exemptions and listed $500 worth of "pantry items" (I kept all the receipts!!) under the household goods category - we were so glad we had the stock of canned goods, paper products, detergent etc. when his hours at work were temporarily cut back a few months after filing!

The OP's interest not to exceed $1,450 in total value of jewelry.

An additional wildcard of $1,150 available to cover any property or cash not covered by other exemptions.

For you to value your jewelry, furniture, electronics, etc. to give to your attorney, simply use garage sale prices - what you could get for the item if you had to sell it today on Craigslist/pawn it/yard sale it!

There are other more "unusual" items that are provided for in the federal set of bankruptcy exemptions. Just google "Federal Bankruptcy Exemptions for 2011" to look them up (and make sure you have the latest dollar amounts) and also make sure to ask your attorney about any specific items you are concerned about protecting with your allowed exemptions.

I hope this helps you and your planning!!

[momofthree]

Obviously, it would be ideal to be able to exempt any cash you have on hand. However, when you file a ch.13, you are allowed to keep non-exempt assets, including cash. It simply creates a minimum that needs to be paid to your unsecured creditors over the course of your plan term. For many filers, keeping some non-exempt items isn't a big deal at all and doesn't change their plan payment.

[ValleYum]

I am sorry OP - I didn't notice this was in the Chapter 13 forum - my apologies.

MomofThree knows her Chapter 13!!!

[muzze58]

I have been in a chapter 13 for close to 5 years in November. The court does allow a little bit of money for emergencies. After all, all of us are going to face unexpected expenses during your case. I am facing one right now and can't seem to find the money without going to a payday cash advance. My car died on Wednesday and I am looking for a beater car. I'll find one but it might take a while.

It's not safe to keep money in home because of the threats of robbery. It's also not safe to give it to a relative for you. You can keep a small amount in a savings account just for emergencies. If you are filing a chapter 13 then your 401k will be safe. They can not expect you stop funding your retirement account. Although, my husband and I were forced into stop paying in the fund because of having to purchase a newer car to incur debt.

Your attorney is always your best advocate. I trust my attorney with my case. I had a bad attorney the first year after I filed. I fired the company and hired my current attorney. They know the laws and can tell you how much you can retain in your accounts legally. Your mortgage will most likely be a claim on your bankruptcy. If you are giving back your home to the bank then the house will be put into your claim.

Bankruptcy is hard, but it is a fresh start. I had a creditor call my husband at work harassing him really bad a year ago. My attorney sent the creditor a letter informing them of the automatic stay and contacting a bankrupt person in an open bankruptcy was against the law. They stopped harassing him at work and at home.

It's nice being able to say to these vultures to stop or you're going to deal with the US courts. It does give you some breathing room to figure out how to live within a budget. Realizing that things can't bring you happiness. To learn to shop on a budget. Today, I went to a big department store that had summer clothes at 50% off the lowest clearance price. I was able to buy close to $300 worth of clothing for about $40! I got a brand new summer wardrobe, jeans for my sister for her birthday, and 2 work shirts for my husband. Before, I would have gone to regular department store and brought home about 4 items for about $100!

So you can learn to live during a bankruptcy and just not buy second hand and eat hot dogs and peanut butter sandwiches. Coupons are now my best friend. You will come out of this fine. I can't believe that I'm almost done with the bankruptcy and it's been close to 5 years. Time will fly for you also. One day you will hopefully be able to have a home again. It's only short term and it's done. Best wishes!