What happens to my paycheck after filing?

[yorkin]

I just went back to work and we are going to file for Chapter 7 in January. I've been researching BK for two years and didn't have any income to worry about during the BK. Now that I have direct deposit what happens during the 30 days after filing and before the 341 meeting. From what I know, everything we have becomes the property of trustee during that time. What happens to my income and how do we have access to money to live during that time??? Any help/answers would be greatly appreciated!!!

[whipster1]

If you have Wells Fargo change banks 'cause they will freeze your account. If not, you get to use your income for your living expenses like normal.

[Bell30656]

If you are afraid that your bank will freeze your account there is always www.skylight.net which is an online bank. I had accounts with BB&T, BOA and Army Federal Credit Union. None were frozen.

[mtbc]

My impression is that the things you have -- or are due to you -- on the day you filed become the property of the bankruptcy estate administered by the trustee, and that if you work after filing and receive further income from that work, it's yours.

Does Wells Fargo freeze the account itself, or just the funds that were in it at the time they heard of the filing?

I asked a possibly-related question in http://www.bkforum.com/showthread.php?p=347299 which may help.

[dspii]

I just went back to work and we are going to file for Chapter 7 in January. I've been researching BK for two years and didn't have any income to worry about during the BK. Now that I have direct deposit what happens during the 30 days after filing and before the 341 meeting. From what I know, everything we have becomes the property of trustee during that time. What happens to my income and how do we have access to money to live during that time??? Any help/answers would be greatly appreciated!!!

The bankruptcy estate is created the day you file....any assets you have at that time are part of the estate. Any income you recieve after that date are exempt from the estate under normal circumstances...like a paycheck. The banks are required by law to honor the automatic stay, so your paycheck should be safe unless you have a cross-collateralization agreement somewhere. During the 30 day or so between filing and your 341 just spend your money wisely and you should be OK.

Be very sure the date you file versus the date you receive your direct deposit, you want as little money in the bank as possible on the day you file. That is the date the trustee will be looking at for cash on hand.

[yorkin]

Thank you so much, that really helps...I didn't know anything about the bank freezing your account after you file...what's that all about?

[mtbc]

When you file your assets at that moment aren't technically yours until the exempt ones are released later in the case. So some banks have been known to proactively freeze the funds until the case has got far enough that the funds aren't going to be distributed to creditors, because they know they're not really yours for a time.

[CCsAreEvil]

WF did not freeze anything I had. Of course, I had < $200 at the time (for joint). No reason to be over the allowed maximums for your account(s)... anything over the max allowed becomes property of the UST.

[tdawg]

WF did not freeze anything I had. Of course, I had < $200 at the time (for joint). No reason to be over the allowed maximums for your account(s)... anything over the max allowed becomes property of the UST.

Wells Fargo did not freeze the < $50 I had in my checking account on the day I filed. I withdrew several thousand $$ that were exempted the day before I filed just in case though. I'd say get your cash out of Wells Fargo just to be safe. ;-)