checking account

[nokia123]

hi, i am new to this forum and to bankruptcy, i just started making payments to my lawyer and i was told that i have to supply my checking information. My question is, do the trustee question how much or how often you go to the grocery store, coffee shop and getting clothes. i have a small frig. and have too shop more often then other people. i know this question might not seem like much but, i wonder what the trustee is going to try to pick on.

[music12]

how often you go to the grocery store doesn't matter to anybody. nothing to even think about.

[AngelinaCat]

Hi nokia123: welcome to the forum.

The reason you are asked for your checking account information is so that your pattern of income and outgo can be seen, and 'crunch' your numbers for the Means Test. No one is going to care how many times you go to the store or anywhere else.

If you haven't been told by your attorney, you will need to supply six months of your paystubs (or pay advices if you use electronic banking), six months of your bank statements and at least your last year's tax returns, both state and federal. Some districts may require two years of the returns.

Good luck to you

[GoodtoGo]

(California) They will be looking for the $1,000 to $10,000 you transferred to your "friends" / kids account, and your checking account is the primary tracing. They'll want that money for the Trust. Unless you show abnormal spending (ie: buy $20 worth of groceries every day, but take out your limit in cash $320), you will be ok.

At least in Calif, the Trustee is looking for larger amounts of $'s that will assist him/her in getting even larger amounts to pay back creditors. It has to be worth their time to pursue. (Example) As it was explained to me, sufficient equity in a car should be more than $5k because it costs a Trustee at least that much to process the order and sell the car to get that $ return. Make sense?

[whipster1]

The trustee is looking for one thing and one thing only: ASSETS

Thus they want to see where you may have those assets, like bank accounts, cash value life insurance, brokerage accounts....

If those things are smaller than say $1000 bucks then not to worry.

Red flags: You were asset rich, made a ton of money, made huge purchases, and now you are dead broke.

From what you have said you are fine.

[OhioFiler]

So long as you're not traveling to Paris for coffee and couture shopping you'll be just fine.

[pinchMYpenny]

Another question. Since we are advised to close checking accounts linked to creditors and open a new one, will the trustee ask why we withdrew all the cash from the old account and have only $50 in the new account?

We have a "Christmas account" that will be paid out this November in the amount of $2,200. We contribute $200 a month. We've used previous payouts to pay for property tax. Since we will not be paying property tax this Dec., we'll probably use this money for lawyer's fees. Will this amount be questioned by trustee.. because there will be a deposit and then withdrawal of the entire amount?

We don't plan on filing chap. 7 until March 2010, or until we get notice of trustee sale of our house.

Thanks.

[StartingOver08]

You are allowed to pay your attorney...in fact the attorney has to be paid before you file Ch 7. Just keep a record of your payment to him/her and you will be fine.

[OhioFiler]

Another question. Since we are advised to close checking accounts linked to creditors and open a new one, will the trustee ask why we withdrew all the cash from the old account and have only $50 in the new account?

We have a "Christmas account" that will be paid out this November in the amount of $2,200. We contribute $200 a month. We've used previous payouts to pay for property tax. Since we will not be paying property tax this Dec., we'll probably use this money for lawyer's fees. Will this amount be questioned by trustee.. because there will be a deposit and then withdrawal of the entire amount?

We don't plan on filing chap. 7 until March 2010, or until we get notice of trustee sale of our house.

Thanks.

You may need to prove the funds were used to pay the attorney. Why don't you move the entire balance to a new account and then write a check to the attorney?

Are you using a CU currently? Unless you have a loan that is payed automatically from your account at a bank it's unlikely you need to move your account.

[pinchMYpenny]

Nopes. Current checking account is with BofA, with direct deposit of husband's paycheck. Credit Cards to be discharged are with BofA, Chase and Citibank.

We have a joint account at Wells Fargo, but no credit cards. We are still not sure if we will file joint or husband only. Mortgage and credit cards are in his name only. I have approximately $6k in cc debt under my name only.

Since we will stop paying cc's and have not paid mortgage, will have some cash in the bank. What will the trustee see as excessive? How do I start making withdrawals to keep cash at home?

[OhioFiler]

Nopes. Current checking account is with BofA, with direct deposit of husband's paycheck. Credit Cards to be discharged are with BofA, Chase and Citibank.

We have a joint account at Wells Fargo, but no credit cards. We are still not sure if we will file joint or husband only. Mortgage and credit cards are in his name only. I have approximately $6k in cc debt under my name only.

Since we will stop paying cc's and have not paid mortgage, will have some cash in the bank. What will the trustee see as excessive? How do I start making withdrawals to keep cash at home?

Whatever you can't exempt will be excessive.

Hiding cash assets from the trustee is fraudulent and you won't get recommendations on here for fraud related plans.

I know when I need cash I use my debit card at the grocery store and use the cash back feature on the terminal.

[pinchMYpenny]

I'm not requesting any recommendations that will be deemed as fraud, please don't get me wrong.

I'm just trying to follow the guidelines that I have read on here and that I have received in my consultations with BK lawyers. But some of this information raises questions for me.. specifically, if I stop paying my creditors as advised..then I will have more money than usual in my accounts. I also have to factor in, that my unemployment will run out in a couple of months, so I should be more careful with the cash.

I know that we should and will not be using credit cards moving forward, it's not like we have much credit available anyways. But it also looks like we need to be careful with what is going on in our checking accounts as well.

I've seen people advising to stockpile on food or pay insurance in full. But I'm always afraid I will need extra cash for emergencies such as car repair or medical. It's scary to know that I can't rely on credit cards as a safety net anymore, but I'm feeling that I shouldn't have cash in the banks neither.. at least before filing.

Just when I feel confident that we are doing the right thing, I start to doubt myself and feel like I'm not "pre-planning" enough or the more I try to educate myself on the whole process, the more confused I am! eeek!

Thanks again for the input, I hope my questions and your answers are helping others out there.

[OhioFiler]

Just don't stockpile more cash than you can exempt.

Of course you'll have more cash than usual when you stop paying your credit cards. However, you need to do a thorough job on your budget and schedule J to make sure there is not much left over to avoid the trustee pushing you into a Chapter 13.

[backtoschool]

The trustee is looking for one thing and one thing only: ASSETS

Thus they want to see where you may have those assets, like bank accounts, cash value life insurance, brokerage accounts....

If those things are smaller than say $1000 bucks then not to worry.

Red flags: You were asset rich, made a ton of money, made huge purchases, and now you are dead broke.

From what you have said you are fine.

This is totally true. My trustee really examined me closely for assets because I used to have a high income. He ended up declaring two $500 checks I wrote to my mother as "preferential transfers of cash assets" because he couldn't find any other assets.

If your food expenses are within the range for your geographical area, you could buy your food every day and no one would care.

[HakunaMatata]

I'm not requesting any recommendations that will be deemed as fraud, please don't get me wrong.

I'm just trying to follow the guidelines that I have read on here and that I have received in my consultations with BK lawyers. But some of this information raises questions for me.. specifically, if I stop paying my creditors as advised..then I will have more money than usual in my accounts. I also have to factor in, that my unemployment will run out in a couple of months, so I should be more careful with the cash.

I know that we should and will not be using credit cards moving forward, it's not like we have much credit available anyways. But it also looks like we need to be careful with what is going on in our checking accounts as well.

I've seen people advising to stockpile on food or pay insurance in full. But I'm always afraid I will need extra cash for emergencies such as car repair or medical. It's scary to know that I can't rely on credit cards as a safety net anymore, but I'm feeling that I shouldn't have cash in the banks neither.. at least before filing.

Just when I feel confident that we are doing the right thing, I start to doubt myself and feel like I'm not "pre-planning" enough or the more I try to educate myself on the whole process, the more confused I am! eeek!

Thanks again for the input, I hope my questions and your answers are helping others out there.

I think your confidence will grow once you understand your exemptions. I, too, was concerned with having too much money. My BK planning was somewhat short-lived (less than two months); although, I had ceased mortgage payments three months prior to filing while maintaining full-time employment. In my situation, all cash (which included a $4500 loan to my sister) was covered in exemptions. Attorney fees absorbed a nice portion of my newfound savings.

If you're anticipating a change in income and a delayed filing, it's okay to save funds now. You will likely need them prior to filing. You can save receipts to document how these funds were legitimately used.