Can you save cash in bank?

[cdmosaic]

I'm considering filing chp 7 now before a yearly bonus hits my 6 month income period. I'm trying to figure out if I can keep the cash once I do receive the bonus. It will be around $11k and I will need this money to find a rental as I'm surrendering my home in forecloser. Can I keep it using the Wildcard exemption? One lawyer said yes, the other no. If I wait 6 mns to file (after the bonus is no longer in my income calc) I don't qualify for chp 7 becuase I no longer have the mortgage payment to include in the means test. I am an above median debtor with hugh medical bills for a minor child, but even that is not enough without the mortgage.

So if I file now I qualify, but may lose my bonus which I would use in about 4 months to move. Or I wait and can't qualify and can't pay for child's medical needs not currently covered by insurance. Complicated and I don't know the best thing to do.

[keepmine]

When will you receive the bonus?

[cdmosaic]

March 13th.

I'm in California, BTW.

[Trixie007]

I have a pending commission from my now-defunct previous job of $5,250 - we are claiming this as part of our wild-card exemption. We are kind of in the same boat as you, if we wait for that check (btw, same thing with our state tax return of almost 3k) DD will no longer be part of our household, so we would be over the median. I kind of figure that even if the Trustee decides to try to take the pending money, it's a heck of a lot better than paying off all our debts. I even told our attorney that I would let the Trustee have my exempt jewelery (other than wedding/anniversary rings and one pair of earrings lol) if it makes them happy. I think he kind of laughed at me when I said that, but I live to entertain.

[cdmosaic]

Thanks for the reply. I guess I can claim it in my wildcard deduction which $21k, but another thought occured to me. Will the trustee ask where the money comes from? Since I won't have it when I file, do they ask for bank records after your filing date? And if the trustee wants to know why there was a $11k deposit from my employer would that trigger the presumption of abuse as they might want to inlcude that in my 6 months income as derived and not received during that period?

[jennordhavn]

I don't see why you can't exempt it using your wildcard. I am in CA and I exempted my anticipated 2008 tax refund as well as my wages (which otherwise aren't exempt in CA under System 2) with my wildcard. I would list it as an asset and exempt it with the wildcard and list it as "Anticipated bonus."

[Trixie007]

I may be getting in over my head here...

Will the trustee ask where the money comes from? If you're listing it as an asset, you'll be telling them where it comes from Since I won't have it when I file, do they ask for bank records after your filing date? I'm not sure - I don't see why they would if they accept the exemption And if the trustee wants to know why there was a $11k deposit from my employer would that trigger the presumption of abuse as they might want to inlcude that in my 6 months income as derived and not received during that period? My understanding from my attorney is that it is considered an asset, not income since you didn't receive it in the 6 months prior to filing - it occurs to me that this may depend on your accounting method, I use the cash method, so money is deemed as income when "received" rather than when "earned"

One downside to me in claiming my commission check as an asset vs. income - if it were income I would be allowed to deduct 15.3% for SE Tax, 15% for Federal tax, and 10% for our tithe - that's 40.3% or $2,115 of that check that we will claim as an asset that will be actual expenses when I get the money!! Plus, if the Trustee finds a way to take the check, I still have the expenses on it! I guess the joke's on me...

[liz417]

Hi,
I'm in Calif too and am facing the same questions. I haven't spoken to my attorney yet, but from what I understand reading these boards, is that I will be able to exempt our bonus (expected mid Feb) and our '08 tax refund too. If you have enough room left in your exemptions, you should be good.

BTW, why did the "other attorney" say you couldn't keep the bonus?

[cdmosaic]

He said that the wildcard exemption does not cover cash in the bank, but other types of assets. He told me to spend the cash on living expenses. Prepay insurance, car repairs, rent on a new place, etc.

[cdmosaic]

There is another tricky part to the bonus. I would file now using January pay stubs, the bonus doesn't show up until March. If the bonus is calculated into the prior 6 mns it totally throws off my average and no way I qualify. Can I get away with that?

[eddiep]

I'm going to lose a potential $65k personal injury settlement. That makes me a little Nauseous

[cdmosaic]

I'm sure it must, don't blame. The help in this case really hurts. Hang in there.

[eddiep]

I don't blame, not a bit. I shouldn't have left it like that, I shouldn't complain. I am greatful to have the opportunity to unload this burdon! I would rather be nauseous than drowning in debt. I spent all that money already, now it is time to pay it back! And I truly mean that.