Spending cash before / after filing?

[nervous1]

From what I've read here, you are only allowed a certain amount of cash on the day you file. I'm assuming that means in a bank account/actual cash. You are allowed to spend it down, but are there any restrictions on how the money is to be spent? I know the wise thing to do is to use it on necessities (stocking up on non-perishable items, eye glasses, medical, car & home repair), etc. Is a wkend getaway a no-no? (hotel accommodations?)

I don't have that much and a huge chunk of it will go to the attorney anyway. I "thought" I would be able to keep it to live on after BK, since the only income I have right now is Ebay and that's pretty unpredictable.

What really makes me sick is that the money I do have was my 403(b) ret. account and it would have been exempt had I left it there. But, at the time, I was desperate to pay cc's & mortgage.

Also, when can you start stashing again with no thread of the TT taking it? After filing, after 341, after discharge or after closing?

[offthewall]

I have the same questions/concerns as nervous1. After reading the threads here regarding cash spending prior to filing, I have seen everything from super paranoia to relax, the trustee does not have time to review everyone's spends in detail.

I think I am not alone in being a bit paranoid about spending prior to filing. I will be doing the optometry/dentist thing to the extent I can afford the out-of-pocket and saving for paying off bk attorney also. Do I need to actually worry about spending $50.00 vs. $100.00 for having hair done, etc. Since halting payments to my cc's, I am finally able to afford to start 'humanizing' myself once again, but I am not sure when I will file...my attorney is waiting for the right 6-month income averaging (I quit my 2nd job a month ago).

Is there a 'red-flag' amount on bank statements from debit card use or cash withdrawals that would bring concern from the trustee and cause trustee to request receipts for the $200 or more (for example) cash taken from checking a month or more prior to filing?

[frogger]

It is no problem to spend your money before filing. Just be prudent with your spending habits, and save your receipts in case there are any questions.

Hair appointments and the like will be no problem at all.

[nc73]

I didn't spend down my paycheck at all. Trustee never asked for the bank statement at the 341. I could have had it exempted anyways so maybe that's why it was never brought up.

[nervous1]

I didn't spend down my paycheck at all. Trustee never asked for the bank statement at the 341. I could have had it exempted anyways so maybe that's why it was never brought up.

How could you have had it exempted? Isn't there a limit (I think here in Georgia it's $600), so how could anything over that amount be exempt?

[youngnbroke]

I asked my attorney, and he said there was no "magic" number...he said as long as i don't have like $4000 in the account, we should be fine??!!

[nervous1]

I have another question. I'm planning on including the house in the BK, so does that mean that I can use a portion of the homestead exemption and apply it to another exemption? Specifically, cash/bank accounts? (My specific reason for asking is that my kid's each have a savings account and I would hate for them to be taken.)

[keptdigging]

The reason you can't find a definitive answer on how much cash you can have at filing (and keep) is that it is state exemption specific. And not only do amounts vary, but the source of the cash can make a difference.

The rules on spending before you file are basically the same. The underlying principle is that you can spend on things you need (and yes you need to see doctors and have cars repaired and have clothes for you and your kids to wear), but you can't spend it down just

[ryan]

I asked my attorney, and he said there was no "magic" number...he said as long as i don't have like $4000 in the account, we should be fine??!!

Ha!...its funny how different state exemptions are. In the neighboring state of IL you can have exactly up to $4000 in the bank at filing date and be fine.

[Exployer1234]

It really does depend on your state. My trustee really only looked at what money I got back on my tax return. it was a pretty good bit, but because I used the money to pay my lawyer and get my car running and pay for my schooling he was fine with that. I also had to use some of the money to get my car running. Just be honest with the trustee on what you spent the money on and have reasons. I am not sure how a vacation would look right at filing. The trustee may not see that as an acceptable expense. If you are filing a chapter 7, after the 341 meeting you are free and clear to spend money on vacation, as long as the trustee list you as a no-asset case. The only thing is if a creditor tries to challenge anything within the 60 days. I did ask my lawyer on this so that is the only reason I am certain that after the 341 meeting and no-asset case is listed it is okay to use your money.

If you are filing a chapter 13 it is a different story though.

Oh also in my state you can have 4000 in the bank as long as you do not have any assets. If you have any assets like a car then your cash and car can not equal more then 4000. Though the trustee allowed one man to have 8000 dollars and listed him as a no-asset case, because he was going through a divorce. So I guess it really matters what you are going through with some trustee's.

[mrskal]

Ha!...its funny how different state exemptions are. In the neighboring state of IL you can have exactly up to $4000 in the bank at filing date and be fine.

I have not read that one yet. We do have a wildcard of $4000 per person, but you may be needing that for other things such as cars. This is one of my dilemmas as well. I need the money I have in the bank for a deposit and first months rent and moving fees to go from Illinois to Florida.

[angles]

[QUOTE=Exployer1234;430741]If you are filing a chapter 7, after the 341 meeting you are free and clear to spend money on vacation, as long as the trustee list you as a no-asset case. The only thing is if a creditor tries to challenge anything within the 60 days. I did ask my lawyer on this so that is the only reason I am certain that after the 341 meeting and no-asset case is listed it is okay to use your money.QUOTE]


So really we need to watch what is in our bank accounts through the date of the 341 hearing and possibly until discharge? I have not been through a 341 yet; will they ask us to bring in our bank records reflecting our expenditures from the filing date to the 341 date?

[feelingnutsy]

I erred very strongly on the side of caution---
and I'm now the proud owner of two envelopes
so full of receipts for the trustee---that they'd choke a horse.

[Fallonedward]

How could you have had it exempted? Isn't there a limit (I think here in Georgia it's $600), so how could anything over that amount be exempt?

I have been looking thru everything and can not find out where one finds out the cash amount you are allowed to have on hand the day you file. I pull $550 from my pay on the 15th and 30th to pay my mortgage on the 3rd of the next month. So I'm thinking I should wait till the 6th or 7th to file so that all of my bills are paid. thanks in advance for help

[Exployer1234]

[QUOTE=angles;430981]

If you are filing a chapter 7, after the 341 meeting you are free and clear to spend money on vacation, as long as the trustee list you as a no-asset case. The only thing is if a creditor tries to challenge anything within the 60 days. I did ask my lawyer on this so that is the only reason I am certain that after the 341 meeting and no-asset case is listed it is okay to use your money.QUOTE]


So really we need to watch what is in our bank accounts through the date of the 341 hearing and possibly until discharge? I have not been through a 341 yet; will they ask us to bring in our bank records reflecting our expenditures from the filing date to the 341 date?

If you are doing a Chapter 7 when you file it gives a financial snapshot of what everything has been like for the last 6 months. The trustee will also ask if you have spent more then 500 dollars on anything. After the 341 meeting the trustee will either list you as a asset case or a no-asset case.

I would just use caution after the 341 meeting. I personally have not spent any money after my 341 meeting just to be on the safe side. If by some chance you are switched to an asset case then you would need to account for the money you just spent after the 341 meeting. So my advice is just use caution after the 341 meeting if you are indeed doing a chapter 7 no-asset case.