Freaking about my case being an asset and how to spend $4,000

[Manolo]

I am trying to file a Chapter 7 while keeping my home. I have borderline the 15K equity that I am showing to keep the home.

I haVE PAID attorney in full $1,350 and now have a life insurance check I had to cash in or I guess they would take it. i am to spend this on essential items. I owe an ecsrow balance that is maybe $1,500.

I am freaking out though about this becoming an "asset" case and they try to take the house. That would not be pretty because of course I would take it right out of their hands as that is not a decision that is up to them but I still want this to go smooth. Should I be concerned?

[keepmine]

Just spend it down.
Catching up the escrow account is acceptable. So is, any needed reairs or maintenace on your home and/or auto.
Take everybody to the dentist as well as the optometrist. There are a lot or ways to spend down cash you can't exempt. No need to freak out.

[debtmonster]

My last paycheck was $3500. That thing was spent in almost 5 business days. $1000 of it went to tuition for my wife's college. We ate at a couple restaurants, paid some utilities, business expenses and before you know it, I was down to just a few hundred bucks in no-time and then I don't get paid until 30 days later.

$4,000 would be easy for me to spend. I would try doing home repairs or healthcare stuff. You could easily spend it on doctor bills for various things if you needed to.

[Never_Again]

You should also keep in mind that a non-exempt asset can be converted to an exempt asset. How is your vehicle? Does it need repairs? Do you need another vehicle that would be covered under exemption (our state allows $10K combined in vehicle equity.

Have you contributed to an IRA this year? If not, you can contribute $5000 ($10K for married couples) per year, and retirement accounts are exempt.

Remember, in a Roth IRA, you can withdraw the principal at any time without taxes or penalties.

I would certainly try to plan for it correctly, and not just spend it here and there. The retirement account is a good way to do pre bankruptcy planning, which is completely legal.