What's with the money orders?

[AfraidOfBK]

I am hearing a lot about cashing paychecks instead of direct depositing.

Here's mys cenario: Husband's paycheck is direct deposited into BofA acct, I also have about 16k debt on a BofA card but good history (still no missed pmts) If I decide to miss pmts before I file in June or July, will they freeze accts? If I remain current and they simply learn of my BK, will they close acccts theN?

I have (per advice of lawyer and Forum) already opened another checking and savings at US Bank, where i have no other financial debts....I am thinking I should have Hubs paycheck direct deposited her instead...then will I be safe, or do I still need to get money orders ot pay every bill?

I have also heard of them restricting access to bank accounts...I do ALL banking and bill pay online with BofA....I was planning on just setting up online bill pay with USBank, and switching over, is this wise? Will they stop me there too?

I am currently missing mortgage pmt, so I do have a little bit of extra funds laying around (not to mention a couple thousand in a CD at BofA.) Should I move all this over too?

IMPORTANT QUESTION: This money in the CD was from a sale of an old car we owned....we used that money to pay our car pmt every month since we could not budget for a car pmt in our regular income...Needless to say the money quickly ran out (one reason for BK) and now the remaining 2-3k is sitting there making us look wealthier than we really are....i am trying to spend down money on necessities (baby coming in May, lots of expenses coming too).....will I have to explain this to trustee? Will they understand?

My lawyer is so nonchalant about all this, he htinks we are an easy Ch7 case....the only assets we have is this small amt of money (which is a lot of money to us) sitting in the bank....Every time I aska question, he seems to think "Youll be fine" but I want to prepare for the worst.

Thanks for any help you can offer....I feel like Im going through this aone...me against the world of bankruptcy trustees

[willbfree]

You need to move ALL money out of B of A if you are planning to include them in your bk. We had three accounts with B of A and our atty advised us to close the accounts on the way home from our first meeting. Atty wanted everything gone before B of A got a whiff of any default action on our part. B of A will freeze your accounts and wipe out all funds to pay off your outstanding debts so it's in your best interest to move that CD as well as all funds including the direct deposit paychecks.

Our atty also advised we stop using ALL checking accounts in mid January for an end of March bk filing. The reason is in our state (AZ) we are allowed to each only have $150 in our account on the day we file. Atty explained if you wrote a check for the mortgage and it hadn't cleared on the day you filed the trustee can claim those funds. Doesn't matter that it was earmarked to pay your mortgage it's fair game for them to take. So you want to stop using your checking account well in advance of filing to make sure all checks have cleared. Each state will be different but you need to know how much you are allowed and ensure you are below on the day you file. It's inconvenient to pay by money order but it sure beats forking out money to the trustee. Thankfully tomorrow is our filing day and we can begin to use our checking account on Tuesday.

[StartingOver08]

The poster above just about said it all. BOA is notorius for removing the funds from your accounts upon default - this includes the CD.

Since all of your accounts are online - make sure to download ALL available statements from each account to your hard drive before closing. Do it now. Go back as far as you can (a min of 2 yrs). Print up only what your attorney actually needs. If the Trustee needs more, you have them available. Once you close the account, or you get behind, or you file BK - you will NOT have access to your statements.

The reason you don't pay online before filing is then each of the creditors will have the new account numbers - even if you select the option to 'not save' the account info - the creditor has a permanate record of your new account. You do not want to have outstanding checks at all on the filing date - for the reason the above poster cited.

So between now and filing, any payments you make, make by money order so the source of your funds to the creditors is not known. Keep a record for the Trustee.