DH's work wont allow paper paychecks.....

[AfraidOfBK]

Where my husband works does not allow paper checks....they only allow (free) direct deposit or a prepaid debit card (for a fee).

What does everyone suggest. I have money I need to spend down sitting in the bank (about 1800) and then if I wait until July to file (I have to cuz of surgery) and I am missing mortgage and cc pmts, i will have an additional 1900 a month to spend down. By july that will be nearly 7k tog et rid of...and thats the earliest i can file. SO -

I would like per the advice of attorney and forum, to use paper checks and just cash them...this will enable me to spend my cash on items without such scrutiny and paper trails (attorney's advice....i plan on stocking up on baby and household items) And it willg et us used to living cash only.

Well, what about this prepaid debit card idea? Isnt that the same as paying for everything out of our checking account? There is a trail with all debit card transactions.

I am wondering because since we have no paper check option, we were thinking of pulling out our excess $ (after bills, utilities, etc) to use for groceries, gas in cars, and other expenses. That way we could track our cash. Will this look fishy. I mean, I will have receipts from the stores but I am really bad at saving them (and thats A LOT of receipts)

What is smarter, just keep doing things the way we are (debti card out of checking acct) or prepaid debit card? I think I oculd plan filing where I file right before he gets paid and after bills hae cleared so that I can avoid those issues.

Also, my couch is about to fall apart (19+ years old) and I could really use a new one. this would be a great way to get rid of money, but will it look ike a luxury purchase? I really could use it....

Thanks, sorry for the long post

[dingdong]

Have you checked your local laws regarding receiving wages on a pre-paid debit card? In many states, they can offer this as an option, but... they have to pay you buy check or cash if you decline.

Check online with the Nevada Dept of Labor, you may be able to receive pay in the form of a check.

[okiebk09]

Have you checked out your exemptions for your state? Here in OK we can keep up to 75% of earnings for the last 90 days. I got paid on the day we filed and there was no issue with the amount in the bank. If you are buying diapers and food, and cleaning supplies you are fine. Now I would not go out and buy jewelry etc but if you are buying things you need there should be no problem. Maybe someone else will know about the couch thing but if he gets money on the card then you take it off there just like cash and then spend the cash. I know the payroll card you are talking about cause my work has them too but you can just take the money off it i believe and spend it. But if it were me whatever i bought i would just save all the receipts and then there is nothing to question. No need to hide things. Get you an envelope and whatever receipts you get put in there and if they want to know where the money went hand them the envelope.

[dingdong]

http://www.leg.state.nv.us/NRS/NRS-6...l#NRS608Sec120

[AfraidOfBK]

Thanks, all, I really appreciate thte research....does this mean i should have DH go into work and demand a paper check, like he should get it in writing or something? I am still a bit confused.

Anyone else have experience with my couch situation?

[TEW]

So is this something new that they scrutinize where you spend your paycheck?
MY attorney encouraged me to use my debit card for everything so I had documentation that I was NOT paying lets say friends and relatives.
I don't get lawyers telling clients to make sure there is no paper trail.

[chad9162]

I agree with TEW....paper trail or receipts are going to be needed if the trustee gets curious about where all the money went. I understand that a lot of your bills aren't being paid but your trustee is going to see where you spent your money. My attorney told me the opposite. If you have extra cash fund a retirement account which would be exempt. Use the money for things that have been neglected and stock up on house items. No offense, but common sense would tell me not to buy a couch before BKing.

Also, your attorney should be answering these questions for....My attorney told me to be honest with and that we would "plan" accordingly.

[AfraidOfBK]

if i dont have a retirement account, wouldnt opening one look fishy....i totally understand the paper trail thing....my attorney just said cash is the way to go?!?! Maybe he was trying to prepare us for life post BK...that is one reason i would like to use a cash budget...so i guess i will just save receipts.

If you saw my couch you might change your mine, chad! But I definitely would have waited for this one to fall to the floor before deciding to file BK. Now that I know I am filing, and i have the money to buy one, i could see it as justifiable....I am going to have to move anyway and im afraid one move and this couch is a goner....then after bk, i definitely wont have the money for a couch!

[chad9162]

My attorney said the "law" is the "standard" meaning you have to have something to define what you can and can't do in BK since there are so many variables. Its like "timing" your BK so that the average 6 months income reflects your true income. Since the code says retirement accounts are exempted they are. I don't think there is a time limit according to what he told me.

As for the couch I'd ask your attorney how the trustee would view that purchase. Since couches cost $1000 or more. Would it fall into a "luxury" category? I would also have him clarify the "cash" concept. I know some districts don't scrutinize Bank statements like others.

[StartingOver08]

In today's economy with everything on sale both new and used you can get a half way decent couch for a couple of hundred dollars - I think spending more than $600 would be a flag - spending more than $750 just before filing - I think is a no-no. JMHO.

[Bell30656]

The company I work for also REQUIRES that all payroll be by direct deposit. I was at one point unable to get a traditional bank account. That is when I found Skylight Bank on the internet.

Due to the fact that Skylight had no free ATM's in my area I learned about "other" ATM sources without fees. You can purchase anything at WalMart and get up to a hundred cash back right at the register. Where I shopped for groceries also did this.

These transactions only show up on the checking account statement as a grocery store or discount store purchase. No cash withdrawal on the statement. Maybe you could make several purchases at WalMart, the grocery store, etc. getting out an extra hundred each time over the pay period.

[catleg]

I would suggest not going to paper check...it is pretty obvious you are trying to hide something...yet nothing you are doing is in any way "wrong" and certainly not fraudulent or objectionable.

If you need a new couch, that's fine, just don't buy stuff on credit cards because you get "airline points" or whatever, use the debit card from the bank instead. If you buy the couch you just have to list it as an asset, hopefully exempt, in your bankruptcy schedules.

And again, using the debit card at supermarkets and other places automatically gives you the paper trail, plus to some limited degree you can get cash back.

I remember back when casino dealers in Vegas were paid in cash in a little "toke envelope". A fair amount of that money never made it home. There are some perils in having cash on hand, if you might be vulnerable to temptation, never mind other issues like theft.

Finally, you mention the term "luxury good". In the context of BK, this term only applies to purchases bought on credit within the 90 days right before you file for BK, and only to the extent they exceed $550/creditor, and even then it only means they are "presumed non dischargeable", which means you simply have to pay for them again with your post-BK income/assets.

You could buy anything you want with your cash, as long as you report it as an asset, and subject to the "real world" limitation that your trustee could call you out on it for being "in bad faith", for which you need a response. (excluding concerns like you have outstanding judgments and get accused of being "in fraud of creditors").

Also, the idea of putting any excess cash you have into some kind of retirement account is an excellent idea. Planning your bankruptcy so as to maximize "what you keep" is perfectly legal as long as everything is disclosed and in reasonably good faith.