Bank account balance and Trustee confiscating?

[happy_ira]

This came up in another thread, but I didnt want it to get lost, so I'm moving/asking it here:

One woman mistakenly had $3k in her checking account and he told her she had to pay that back (guess she was over on exemptions). She apparently was told by her attorney to pay her mortgage, so she the money sitting there on the day she filed--so back it went.

As for the above woman... I feel like I'm going to end up in the same situation (if it comes to breaking out the bank stmts, but please G-d not), which is so idiotic. If someone is reaffirming their mortgage, then of course it needs to be paid. It becomes a timing game. Unfortunately, I understand the Trustee earns X% of assets he finds (something like that?) so this is an easy way for them to find $$. Completely unfair. That said - I have a question: If someone has to give back the extra money that was in their bank account, do they only do so if the ch7 goes through? In other words, if the trustee asks for the $$$, I assume he can't ask if the ch7 is denied. Correct?

[happy_ira]

Follow-up question in my own thread since I am freaking out about this. I realize now my check register says $100 but the actual balance in my checkign statement on date of my amended filing is $3000 because the mortgage check has not been cashed/cleared yet. Therefore, should I file an amended amended petition? (I'm sure my atty will eb less than thrilled since he thinks it might tip the Trustee into looking at things more closely).

I already filed one amended petition because of some due to changes unforeseen at time of filing. If I have to file another amendment that coudl save my $3000 though, shoudl I do it once the check clears my bank or will it look *really* bad to the Trustee? Or who cares since maybe he only looks at the final amnded printout? My 341 is in end of Sept so there is still time.

Any thoughts? Help!! Thank you.

Flippping out.

[TEW]

sounds like that was a chapter 13 ira take a deep breath and calm down

[Keebler]

I was sweating bullets tring to get my accounts down to nothing in time to file. I asked the attorney about timing and he looked at me like I was an idiot. He was completely unconcerned and told me it didn't matter.

Ironically the one transaction that didn't go through in time to file was the check I wrote the attorney for my remaining unpaid balance. They sat on the check for more than a week!

I'll be pissed if I need to spend that money twice because my own attorney gave me bad advice AND sat on the check for so long.

[lillaimof2kids]

Before we filed Ch 7, for several weeks I paid with money orders for all bills. That way there was no waiting for the money to clear the bank.

[AngelinaCatHub]

I believe you will be alright. You are allowed to use your money for ‘exempt’ things like food clothing and of course housing. Just because the balance does not show the check has cleared, obviously the check has been disbursed. You aren’t likely to want to purposely write a bad check so while in “float” the money has already been dedicated to rent or mortgage. Chill down. These Trustees are people and they can be reasoned with if you are not obviously doing wrong. Now days, it takes only a day to clear a check unless the recipient holds it for a batch deposit. ‘Hub

[WoodSprite]

I agree with 'Hub. My attorney told me in advance that we needed to time the filing for when I'd have as close to a zero balance as possible (zero for real, not just in my check register), so, like lillaimof2kids, I used money orders there at the end, too, and we timed the filing for the day before a direct deposit hit.

If that money had gone for a preferential payment you'd be dead meat, but I think if you can show what you used it for, you'll probably be okay. It's too bad your attorney wasn't more helpful with this detail, though. You shouldn't have to worry about this.

The important thing to remember is that you have nothing to hide. You're not doing anything immoral or illegal, and if you can calm down and not send off those vibes at your 341 things will probably go better for you. Nice long weekend coming...enjoy it!

[Keebler]

Another thing my attorney didn't seem to know or care about is earned but unpaid wages. Most companies have days of time between the end of a pay period and the date they pay you. This is frequently a whole week!

In any case, during this time period you have earned wages that have not been paid yet. I tried to list them and exempt them and the attorney treated me again like I was an idiot and removed them from the petition.

I think the trustee can also go after part of those funds but he's probably no smarter than my attorney.

I think they can take the money in your account and also part of earned but unpaid wages at the time of filing. I also think it's luck if your particular trustee goes after these funds or not. This in another case where "your milage may vary" depending on where you're at.

[happy_ira]

I'll be pissed if I need to spend that money twice because my own attorney gave me bad advice AND sat on the check for so long.

This is a question I have that keeps coming up: let's assume you get screwed and have to "pay it twice". Is that true ONLY if you get a Ch 7 discharge? Meaning, is it true you dont have to pay it if you dont get a ch7 discharge? Otherwise, theyd jus be taking money away for no reason?

Correct?

[ThreadsSnapping]

Keebler, I'm guessing your attorney didn't care since there would be a period at the beginning that would have belonged to before the lookback period but was counted in since you received the money then but earned it before. It just evens out in the end.

TS

[Keebler]

This is a question I have that keeps coming up: let's assume you get screwed and have to "pay it twice". Is that true ONLY if you get a Ch 7 discharge? Meaning, is it true you dont have to pay it if you dont get a ch7 discharge? Otherwise, theyd jus be taking money away for no reason?

Correct?

I think you're correct.

I can't imagine how a dismissal, for example, would result in assets being taken. It seems to me that assets only get taken in the process to discharge debts in a Bankruptcy.

Keebler, I'm guessing your attorney didn't care since there would be a period at the beginning that would have belonged to before the lookback period but was counted in since you received the money then but earned it before. It just evens out in the end.

TS

I understand and agree with your point about the look-back period but that only answers the question of income and expenses.

Earned and unpaid income on the day you file is important when the question of "What assets do you have that can be taken because they aren't exempt?" comes up. I wouldn't have even thought of it myself if not for the fact that my state allows me to exempt 75% of earned and unpaid wages. The attorney didn't have me list the exemption at all.

[ThreadsSnapping]

Maybe the trustees don't bother with that area of the law much if you get paid weekly. Now if you get paid on the 1st and you filed on the 30th it might be a bigger issue. But if you are getting paid the same thing pretty much every week I don't think it would affect things much and would be more work for the trustee than it's worth.

Or maybe they only concern themselves with that if you are self-employed. A contractor who finished a large job but has not been paid yet?

Just random thoughts that popped into my head.

TS

[Keebler]

Maybe the trustees don't bother with that area of the law much if you get paid weekly. Now if you get paid on the 1st and you filed on the 30th it might be a bigger issue. But if you are getting paid the same thing pretty much every week I don't think it would affect things much and would be more work for the trustee than it's worth.

Or maybe they only concern themselves with that if you are self-employed. A contractor who finished a large job but has not been paid yet?

Just random thoughts that popped into my head.

TS

...or if you were a salesman and had earned a tidy commission that hadn't been paid out yet.

[ThreadsSnapping]

Yeah, that too! A big commision check would be nice right about now. But that would mean I'd have to get a job first!

TS

[Tabbygirl]

I think, too, that woman also must have had exempted herself out, for lack of a better term--she sounded as though she had a lot of other assets (although small) but that they added up and the $3000 became an issue because it put her over the allowed exemptions.

I bet you will be ok if you "plan" how you represent everything. Don't lie, by any means, but do "plan" and pay attention to how the case is presented.