Maintaining bank account for fees post filing?

[bornfree2]

I understand that once debtor files, estate is transferred to trustee and one is 'locked out' (not in terms of bank but in terms of legal rights). Im seeing on recap that people claim bank accounts with very small balances... perhaps on advice that the safest place to claim exemptions is in cash so to elect the choice to withdraw funds pre filing.

However, can someone deposit funds into an account so it maintains minimum balances required for monthly maintenance fees during the BK process?

Example:

• Debtor withdraws funds pre filing and leaves balance of $25
• Bank charges monthly fees of $10
• Month 1 , 2 pass and bank eats up $20, leaving $5
• Month 3 pass and now account is in negative.
• Debtor now is liable for fees upon fees
• Bk process ends, debtor now has to clean up new messes

Can debtor go into account post filing and add in funds to keep these fees available for bank. Another case of ask for forgiveness later due to these being essential expenses?

Of course, if one had the money, one should just park money there for 6 months for fees.... if one had the money...

[justbroke]

No one is "locked out" from things. As one judge opined, the Trustee and the debtor have a type of joint tenancy, but the debtor is enjoined from selling or transferring property of the bankruptcy estate. For the most part, that means physical assets like a car or home.

You're overthinking this.

And I don't know what you mean by "safest" place either. Even money in your mattress is subject to turnover if you don't have an exemption that covers that money.

Just to repeat, the withdrawn money is still subject to the exemption status. I can tell you that 99% of people filing bankruptcy, don't have much cash. That's why they're filing. They are not worried about this.

If you have exempted all your cash, then spend on necessary things (food, shelter, clothing, gas, transportation, etc). If you made a mistake with the claim of exemption, then you'll have to deal with that when the Trustee comes for what you spent.

But, again, hardly any filer ever worries about this, nor should they.

TL/DR; you are responsible for everything post filing including incurring fees. Nearly every person that files bankruptcy never changes their bank or do anything differently. They simply claim an exemption of any remaining funds which will be physically in the bank at the time of filing. That simple. For Chapter 7, anything earned post filing is not property of the bankruptcy estate.

TL/DR Part 2; there are banks that have no-fee checking and savings accounts.

[bornfree2]

By 'safest' I meant cash covered by exemptions that is valued at face and hence cant come into dispute by different appraisal opinions. For me 'safest' also means less time spent trying to argue these things. Household goods, essentials for working, a car, and grubstake/wildcard cash is pretty much what i have and want to preserve for my Fresh Start.

Yes..im Pro Se OCD. I look for every letter in the alphabet to dot and cross. Probably the most extreme worry wart the BK court will ever meet, but maybe I can market this obsession to a law firm looking for a diligent legal aid on the path to paralegal career.

[flashoflight]

You're worrying too much. Bankruptcy is a massive factory in California because we have such a huge population. You have to exceed the exemption and it has to be worth the time and selling costs to turnover property to the trustee even if you are a little bit over. Each trustee makes about $70 per case and he doesn't want to waste time on you unless there is low hanging fruit like a paid off new car or a house. He will spend 15 minutes on your case and it will be done. A used car that is $1k over exemption is an example of something the trustee doesn't want. Towing, storage, auction fees, etc. Your $500 dog is something he doesn't want. Why would he take your dog, store him, feed him, and try to sell him? The trustee is a lawyer, not a car dealer or a dog breeder. California has pretty good exemptions compared to some other states. You won't lose your property. I think there was a statistic in the central district that 99% of chapter 7 were no asset cases. Stop worrying about this.

[bornfree2]

You're worrying too much. Bankruptcy is a massive factory in California because we have such a huge population. You have to exceed the exemption and it has to be worth the time and selling costs to turnover property to the trustee even if you are a little bit over. Each trustee makes about $70 per case and he doesn't want to waste time on you unless there is low hanging fruit like a paid off new car or a house. He will spend 15 minutes on your case and it will be done.

Lets play hypothetical. California has $30k in wildcard exemptions. So you are saying if someone converted their entire estate (outside of car and other stuff in there) to $30k in cash in the bank, the Trustee is going to be 'meh no assets here'.

Now extend it a bit further. Do you think creditors are not going to be filing objections and adversary proceedings to get their teeth into that $30k cash? Or hammer the debtor into an agreement post bk (i mean they somehow intimidate them to signed a reaffirming agreement)

Again, this is not at all me just a hypothetical thought experiment. It just seems unreal that someone can walk away from debt with $30k in their pocket. Everyone would be /should be doing that then right?

I promise i will come back on here once this is all done and if you guys are right, ill be right along you guys telling the next OCD worry wart that Ive been there, done that, and its going to be okay.

[justbroke]

Unreal? You can walk away with an $500,000,000 house, in Florida and a few other States, upon filing bankruptcy. Exemptions are there to protect property regardless of bankruptcy. Every bankruptcy attorney and the supermajority of creditors (that have bankruptcy departments) understand bankruptcy.

For some reason, the worldview of bankruptcy is that the debtor loses everything. That is not the case.

That worldview is such a problem that people don't understand why their neighbor just filed bankruptcy and received a discharge, yet still have their cars, home, and toys. The bankruptcy system in the United States is not the old Roman system. It is actually designed to give the debtor a fresh start. It is not designed to beat them to a pulp and spit them out on the sidewalk.

Personally, I have never seen a creditor object to a claim of exemption. That is the Trustee's job almost in its entirety. A creditor could object, but that's so far out there that it's just one of those things that we don't focus upon. To say it's rare, is still giving it too much limelight.

(If anything, the only thing I've seen is certain creditors, usually banks, arguing about a homestead claim of exemption under very specific parameters. These usually happen because of lien issues, not the exemption per se.)

[bornfree2]

Donald Trump has entered chat .... " bankruptcy code ... i know it all ... all the codes ... (deep inhale) .. some say .. i have the best bankruptcies ... beautiful bankruptcies ... bankruptcies the world has never seen "

;)

[flashoflight]

Lets play hypothetical. California has $30k in wildcard exemptions. So you are saying if someone converted their entire estate (outside of car and other stuff in there) to $30k in cash in the bank, the Trustee is going to be 'meh no assets here'.

Now extend it a bit further. Do you think creditors are not going to be filing objections and adversary proceedings to get their teeth into that $30k cash? Or hammer the debtor into an agreement post bk (i mean they somehow intimidate them to signed a reaffirming agreement)

Again, this is not at all me just a hypothetical thought experiment. It just seems unreal that someone can walk away from debt with $30k in their pocket. Everyone would be /should be doing that then right?

I promise i will come back on here once this is all done and if you guys are right, ill be right along you guys telling the next OCD worry wart that Ive been there, done that, and its going to be okay.

Here is another California example:

$1 million in retirement accounts (IRA/pension/401k)
$600k equity in a house in Los Angeles county or the Bay Area
$2ok in cash spent down to buy a HVAC system (no wildcard available due to the house so debtor has to spend it down)
$5k car ($1k over exemption)
$5k in furniture and household goods
one dog (I don't think there is a valid exemption for a pet)

Total $1.6 million and a dog that the creditors can't get. I'm sure by now there are dozens of debtors in California that got the full $1.6 million. Even more is possible since non-IRA accounts don't have a cap.

This person will NOT get any objections from the trustee or the creditors. In a 7, this debtor is one and done. In a 13, he pays his disposable income for 5 years and he's done.

One of my friends put a non-homestead Alabama 2nd home that is worth $20k in his $30k California wildcard. Trustee did not try to sell that house even though there would be profit for the trustee and creditors even after expenses. No creditor objected to his "vacation" home not being used to pay down credit cards.

You can put a $30k luxury BMW, gun collection, RV, ATVs, gold bars, crypto, cash, etc.... in that $30k wildcard. It is not necessary to turnover your ATVs to pay off the credit cards as long as you got the exemptions to cover it.