Use of cash pre-BK

[Hope4TheBest]

Hi - new to the forum and have been skimming topics for the last day or two. I wonder if I could get some advice here.

We are swimming in cc debt, have two homes that are upside down (to the tune of about $300K total) but have some cash on hand (savings for emergency). We understand that cc charges in the 90 days prior to filing can raise objections, what about the use of cash pre-BK for purposes other than paying back debt? We have held back on making vehicle repairs, traveling to see relatives, etc as we tried to back away from the abyss but it's not looking good.

We are in CA so will have a certain exemption amount but we're thinking we might even be over that (after using it on our truck (paid off), wife's ring and cash). Anyone with an experience like that?

[AngelinaCat]

Welcome to the Forum. I have moved your question into it's own thread so that it will get more attention.

[LSUTiger32]

My attorney told me that it's usually OK if you can prove it was on living expenses. Vehicle repair I think would be fine, but I wouldn't try to submit receipts from vacation as proof of living expenses. Just document everything you spend the cash on and make sure it is a necessary living expense.

Pre-BK is a little different but you will have to submit your three previous bank statements to the TT including the account that is holding that cash.

[downsized]

We were told to spend cash as necessary and keep receipts just in case. Clothing, vehicle repair, home repair, etc.....needed items just as your utilities and food are. We were never asked for any receipts, but I did have them with us at our 341.

[tinfoilhat]

When you get an attorney and also when you file, large amounts of money being used/moved on non necessities are usually all they are concerned about.
By large I mean $600+ from what I've been told and asked.

[StartingOver08]

When you get an attorney and also when you file, large amounts of money being used/moved on non necessities are usually all they are concerned about.
By large I mean $600+ from what I've been told and asked.

This $600 is cumulative over the 90 day period before the filing date.
The petition/trustee is looking to see if you have paid any creditor $600 or more during the 90 days just prior to filing.

[AngelinaCatHub]

This $600 is cumulative over the 90 day period before the filing date.
The petition/trustee is looking to see if you have paid any creditor $600 or more during the 90 days just prior to filing.

Yes that would be preferential unless all creditors were paid equally and it added up to 600. Then I believe it would be discounted. What they really don't like (I KNOW personally) is if you pay an insider. Like, 5K. Guess what, it cost me 5K not to have them sue my god-daughter for the money she loaned me. A powerful lesson. 'Hub

[tinfoilhat]

This $600 is cumulative over the 90 day period before the filing date.
The petition/trustee is looking to see if you have paid any creditor $600 or more during the 90 days just prior to filing.

I was told any substantial amount of money paid to anyone.

[gwar11d2]

First time poster, long time lurker here...

So, I'm about to file.

I had to buy a computer for my work and I was planning on spending the money that I'm saving by not paying CCs and paying the one card that I used to buy the computer. The rest of the money is going towards lawyers, etc.

How bad would it look to pay one creditor $1000 and none to the others of I'm filing in about 60 days?

(Sorry for the thread hijack, but it is also somewhat on topic)

[OhioFiler]

First time poster, long time lurker here...

So, I'm about to file.

I had to buy a computer for my work and I was planning on spending the money that I'm saving by not paying CCs and paying the one card that I used to buy the computer. The rest of the money is going towards lawyers, etc.

How bad would it look to pay one creditor $1000 and none to the others of I'm filing in about 60 days?

(Sorry for the thread hijack, but it is also somewhat on topic)

It won't effect you. The exposure is for the creditor who may be forced to return the $1,000 to the trustee.

My suggestion is make a couple token minimum payments to the card you used to buy the PC so it doesn't appear you bought the PC knowing you weren't going to pay for it.

[gwar11d2]

It won't effect you. The exposure is for the creditor who may be forced to return the $1,000 to the trustee.

My suggestion is make a couple token minimum payments to the card you used to buy the PC so it doesn't appear you bought the PC knowing you weren't going to pay for it.

That makes sense... maybe 1 or 2 $200 dollar payments before I file will look OK... I am so nervous and so is my wife...

[OhioFiler]

That makes sense... maybe 1 or 2 $200 dollar payments before I file will look OK... I am so nervous and so is my wife...

I was thinking more like $25 payments.

[gwar11d2]

I was thinking more like $25 payments.

Oh that sounds much better I don't know why but I think I'm still in the "guilty" stage of bankruptcy. Paperwork being signed on Sep 1st at the lawyers office...

[OhioFiler]

Oh that sounds much better I don't know why but I think I'm still in the "guilty" stage of bankruptcy. Paperwork being signed on Sep 1st at the lawyers office...

Bankruptcy is a business decision. There is no personal relationship between you and those credit card companies. They aren't bothered at all by your decision to file BK, you shouldn't be either. Forget the guilt and look forward to your new start.

[2manybills]

As for the California exemption, we exempted like $800 that was in our checking account for bills on the date we filed. Also, for my husband's car, etc., a motorcycle, tools. We still had some of the exemption left. We weren't ask to produce a checking account statement or anything. The only thing we produced was our paystubs and one tax return as is the normal.