For those of you who remember, sorry to be redundant, but in February, I had a large chunk of cash come into my business from clients that were past due, which messed me up on my plan to file March 1st. I've managed to spend down some of the $$ (about $10,000) on back taxes, car repairs, and medical, household and personal necessities, but still need to spend down further. I plan to spend at least another $5,000 this week on business expenses, which will leave me about $6,000 in the bank. Is there any rule of thumb on how long I should wait to file after I spend this kind of money? If I use the Federal exemptions, I can keep the $6,000 in the bank, but I am just worried about spending too much money too close to filing. Every single thing I spent money can be easily justified--absolutely no luxury items. My business expenses will be the same-important and necessary and overdue. But $22,000 is a lot of money to spend in a couple of months so I am uneasy about filing too soon. And I am being counseled to file sooner, rather than later due to some potential income coming in later in the year. Advice anyone?
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I filed just after receiving a decent sized Federal Income tax refund (approx $5k) and spent the money on bills, atty. fees and gas, food, etc. At the 341, the Trustee asked me for proof of what I spent it on (I guess to make sure I didn't have it stashed under a matress or bought a new plasma tv).
She was shocked when I pulled out a fist full of receipts all separated by month going back several months. The reason why I took the receipts to the 341 was so that I didn't have to mail them later and delay things further, but it worked and she didn't ask me a thing about those expenses and trust me, my Trustee is the most thorough in our District and I survived it.
Just keep your receipts and you'll be fine.
Filed Chapter 7 (Primarily Business Expenses) 04/10/2008 FICO 468 :cry:
341 on 05/06/08:unsure:House appraisal on day 63:blink: 07/10/2008 Discharged-Asset Case!!!:yahoo:08/09 Transu 559, Equifax 636, Experian 647
Case Closed 07/15/2009 :D:yahoo: -
good advice. Thank you.Comment
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Yes just keep receipts. We had a similar situation in that hb received a LARGE paycheck ($30K) 2 weeks after filing and we didn't exempt it. So we paid a bunch to taxes, bills, groceries etc. and when our 341 rolled around we still had about $14K left, never even was an issue. As long as what you're purchasing is legitimate and can be proven you will be fine.Comment
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GREAT. I just hope I get a trustee like yours . . .Comment
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