Cash payments for Rent, will it be a problem in Ch 7?

[tomriddle]

Greetings to All,

I have been reading this forum for the past 5 months, and have learned LOADS of valuable information. Thank you in advance to all the board posters and contributors.

Now for my problem.

I currently live with my parents. I moved back home due to a personal relationship ending badly and have been at my parents for about a year. My parents and I have a VERBAL agreement in regards to rent, utilities, food and miscellaneous household expenses. The agreement is I am obligated to pay 1/3 of the mortgage, 1/3 of utilities and contribute $100 for household food per month.

Ever since moving back to my parents, I have paid them my rent in cash. Why cash? because that's how my parents prefer to receive the rent. They're old fashion when it comes to money.

From reading posts about issues similar to this situation I can only assume this may/will be an issue with the trustee, as there is no visible evidence of me paying rent and contributing to household utilities and expenses on a regular basis.

Will the trustee want to see my parents bank statements?

Will a notarized affidavit declaring our verbal agreement be enough to suffice as proof of my paying rent?

Any suggestions on how to best prepare a ch 7 filing, and how to prepare for a 341 meeting with this sort of cash payment history is appreciated.

Thanks again to the all the contributors, the time you take to respond really helps out.

[Ruinouswax]

I have a similar arrangement with my aunt and it's all in cash and the trustee didn't mention a single thing on my bank statements, I was worried silly that he'd scrutinize every transaction but he never said a thing. I'm not saying all of them will be as nice or as easy as mine but unless you're withdrawing very large amounts regularly (most of mine were in the $500-600 range, once a month), I don't think it'll raise any alarms. Here's what I did do though. I printed out the last three months of my statements and went line by line and detailed what each cash transaction was for. I not only went to paying my housing with cash, I started paying cash for EVERYTHING. It may not be for everyone but it really lets me keep an solid track of my spending. So whenever I took cash out, I made a note of what it was for, he never asked me about it but I was semi-prepared.

[killinstinct]

Just find a way to provide some documentation (i.e. notarized statement, agreement, etc.) and you'll be fine. Likely it won't even be brought up, especially if you are an under median filer.

[music12]

i don't think you need to provide documentation except your signature on your petition, which is under pains and penalties of perjury. that's better than any kind of notarized affidavit anyway. since it's rent, it is an expense that nobody will wonder about - it's a necessity, everybody pays rent.

nobody has the right to look at your parents' bank accounts.

so i just wouldn't worry about it.

[backtoschool]

I think having a signed affadavit and rental agreement with your parents cannot hurt, but I agree with the other posters that you probably won't be questioned that much.

I also would be ready to show in YOUR bank statements where you withdrew the money each month to pay your parents.

[music12]

i think only if the trustee questions anything, you would get an affidavit from your parents saying that indeed you paid this rent.

i agree with backtoschool that your own statements should be consistent with your paying rent in cash. if they are, then if anybody asks you can show those, and then if someone still is not satisfied, you can get the affidavit from your parents.

but i seriously don't think it will even come up. everybody pays rent even to parents.

[tomriddle]

Thank you for your responses. It clarifies things. I'm aiming for a mid-October filing, still debating to go Pro Per or hire an attorney. Thanks again!

[MrSmithster]

i filed Pro Se and never had to show any proof of rent payments or a rental agreement. i beleive only if your in a lease, do you need to file docs with the court, although its always good to be prepared.