? about the time between filing and discharge, how to pay for services.

[2spotteddogs]

Hello,

I am a new user to the forum. Good site, lots of information.

I live in Arizona, I have just retained an attorney who is guiding me through Ch.7.

I have nearly finished all of the paperwork and will do the required courses this weekend.

One of my questions is, what happens after I file and a trustee is appointed, to my bank accounts? I understand that the accounts should be low or nil when you file, but what happens when I get my paycheck and there is more money in the account?

In my specific case, I am a Small business owner (S Corp) and I bill my clients weekly. That money goes into my business account, and then I get a paycheck.

Will my bank accounts be locked? How will I continue to pay my bills (elec, gas, mortgage, fuel costs, etc)?

I have searched the forum and could not really find an answer. If the question has been asked and answered before, could you paste the link in your reply.

Thank you.

[willbfree]

2spotteddogs you only have to make sure you are under the AZ limit on the day you file your Ch 7. Make sure your bank account has less than $150 single or $300 married couple on filing day. Anything over that will belong to the trustee. Otherwise it doesn't matter and you can resume using your checking account immediately after your filing date. The filing day itself is the only one the trustee is concerned about.

Your biggest concern is to stop using your checking account BEFORE you file to make sure all checks have cleared so you are under the limit for AZ. Pay everything with money orders before you file and keep records.

Also make sure that your bank is not one that you will be filing against in your bk. If it is, open a new account at another bank and close that first account. You don't want any funds in a bank that will be listed as a creditor in your bk.

[arami008]

2spotteddogs you only have to make sure you are under the AZ limit on the day you file your Ch 7. Make sure your bank account has less than $150 single or $300 married couple on filing day. Anything over that will belong to the trustee. Otherwise it doesn't matter and you can resume using your checking account immediately after your filing date. The filing day itself is the only one the trustee is concerned about.

Your biggest concern is to stop using your checking account BEFORE you file to make sure all checks have cleared so you are under the limit for AZ. Pay everything with money orders before you file and keep records.

Also make sure that your bank is not one that you will be filing against in your bk. If it is, open a new account at another bank and close that first account. You don't want any funds in a bank that will be listed as a creditor in your bk.

why is that? Will the funds be paid towards the creditor?

I had to list my husband's account due to community property state(CA) and I listed the bank as a creditor?

What will happen. My name is not in the account.

[2spotteddogs]

Thank you for the replies.

I have multiple checking accounts with my bank (bus and per). I also have two credit cards (bus) with low amounts still due (but not low enough that I can pay off now).

Can I keep those cards as long as I continue to make the payments? Or no matter what, since I am filing 7, they may seize funds for that debt? (I want to keep those cards for bus purposes, not very active nor large amounts but helpful when buying equipment to resell to customers).

I will ask my attorney all of this as well, just thought I would keep the post going, it may be of help to others.

[chad9162]

why is that? Will the funds be paid towards the creditor? I had to list my husband's account due to community property state(CA) and I listed the bank as a creditor? What will happen. My name is not in the account.

Then you have nothing to worry about. If you are BKing any debts at you current bank they could freeze your savings and checking accounts in order to pay debts. So move your money to a bank that you are not including in the BK.

In your case you are listing your husbands account as an asset. I'm not quite sure why you would list his bank as a creditor because it isn't your creditor. When it comes to a non-filing spouse there are variables when it comes to their income and assets. But mostly don't try to hide money through his account.

[chad9162]

Thank you for the replies.
Can I keep those cards as long as I continue to make the payments?

NO! So make sure you change banks or risk accounts being frozen....

[StartingOver08]

Thank you for the replies.

I have multiple checking accounts with my bank (bus and per). I also have two credit cards (bus) with low amounts still due (but not low enough that I can pay off now).

Can I keep those cards as long as I continue to make the payments? Or no matter what, since I am filing 7, they may seize funds for that debt? (I want to keep those cards for bus purposes, not very active nor large amounts but helpful when buying equipment to resell to customers).

I will ask my attorney all of this as well, just thought I would keep the post going, it may be of help to others.

You lose the business credit cards when you file (as they usually have a personal guarantee).

If you are filing a personal Ch 7 - the S-corp is considered an asset of your Ch 7. The Trustee will want ALL A/R for your S-corp as of the filing date.

The amounts in your personal accounts and your business accounts count as cash available to the Trustee. So ANY amount over the exemption goes to the Trustee. That is why another poster wisely told you to make sure the checks have cleared before filing - the Trustee does not take into account outstanding checks.

Some Trustee's are interested in taking over your business when it is an S-corp. Discuss this with your attorney at length - find out about how the S-corps are handled in your district.

You may have to shut down your business. Look in the small business section on this forum for articles.

[2spotteddogs]

NO! So make sure you change banks or risk accounts being frozen....

Again, thank you for the replies.

SO I am assuming that I should open up accounts now, have low balances (less than $150) and list these new accounts in my BK paperwork?

[StartingOver08]

Yes. Open the accounts now at a neutral bank/CU.

[WillinVT]

Quick question along these lines.

I have an auto loan at a bank that I plan on reaffirming, but I also have a checking account with this bank. If I am reaffirming the auto loan, will my checking account be ok during this process?

[chad9162]

Again, thank you for the replies.

SO I am assuming that I should open up accounts now, have low balances (less than $150) and list these new accounts in my BK paperwork?

Yes...and all accounts are listed in BK. Make sure you get all statements before closing. I didn't close the checking instead I just moved everything to a new bank....

[chad9162]

Quick question along these lines.

I have an auto loan at a bank that I plan on reaffirming, but I also have a checking account with this bank. If I am reaffirming the auto loan, will my checking account be ok during this process?

It should be BUT some banks can limit your online access after BK so call anonymously and ask. As long as you're not going to cause them a loss it should be okay, but you never know. I might switch just to be sure...

[WillinVT]

It should be BUT some banks can limit your online access after BK so call anonymously and ask. As long as you're not going to cause them a loss it should be okay, but you never know. I might switch just to be sure...

Thanks.

I do have another checking account with another bank and the account I have with the bank with the auto loan only has the minimum amount to keep it open, so I will just wait and see what happens.