What to do with money prior to filing?

[doomed]

If you all recall, I got into some big trouble after my job was cut last year and we had to move back home and take a paycut. We blew through our savings very irresponsibly, especially after my son was very ill. We stopped paying our mortgage on our house in the old state in November of 2009 and it affected all of our other accounts with them -- I previously would deposit the money into the bank and then transfer it to all of my different accounts to pay the bills (4 cc's, 2 mortgages, 2 car loans, personal loan, etc) Anyway after we stopped paying the mortgage but kept trying to pay the other stuff, they would take the money as soon as it was deposited in the account and put it towards the mortgages.. UGH. They killed my web bill pay and locked my account and from that point, I just gave up. So I haven't paid this particular bank ANYTHING in many months because they would do this. I eventually started to pay our car notes again because I could mail in the money and it would go to a different department, but not the mortgages or the CC's.

And as I said before, we were doing stupid things with money and I spiraled out of control and I'm trying to stop that now..

My question is, since we're not paying thousands of dollars to these people anymore, and because I am trying to stop going crazy and control spending and set us on the right path after bankruptcy, what should I do with this exxcess cash? Or will they see it and see we're not paying bills and presume abuse??? TIA guys......

[tobee43]

is your bankruptcy discharged yet??? did you file 7 or 13???

if you are done and rec'd your discharge or more importantly, the order approving trustee's report finalized....then you are no longer obligated to justify what you do with your monies.

we, however, are saving EVERY single dime...but no longer trust any bank whatsoever. we keep small amounts in two checking accounts, both with debit cards to make purchases when needed. mostly we use the cards for food, etc. all of our rent, utilities are auto deducted from those accounts....any excess is we keep safe and sound and locked away....that way we have to "think" about touching it. although we did not go bankrupt because of over or incorrectly type of spending. we did due to job loss and illness which cost us an excess of 200k in medical expenses...lost r house, car...after 33 years...hard to swallow.

and we r still fighting although the bankruptcy is over because of the house we surrendered...it's an uphill battle, but it will be over we hope soon!

[ohiojewel]

Lots of ideas on this thread to use the excess cash

http://www.bkforum.com/showthread.php?t=60829

[doomed]

tobee, we haven't even filed yet, as we're waiting on our lawyer to research an executory contract before we file. I am sorry to hear about your situation -- ours is similar -- we have over $60,000 in medical debt when our son got sick and we didn't have insurance Previously, we had a plan to get out of our current debt but stopping paying our mortgage and buying health insurance and letting our bills go to the wayside while we were wreckless didn't help.

So all of those suggestions are for AFTER filing, right? What about before?

[Maine]

Are you going to try to keep the house? cars? If so, you should be paying them. The late payments will not disappear in bankruptcy, and might cause problems if you want to keep these assets.

To keep the bank from grabbing your money you could start a new bank account at a bank not linked to any of your loans. If they have a garnishment order against you this will not work. They can simply garnish your new account when they find it. If this is not possible use postal money orders to pay any necessary bills, and keep accurate records from now until your 341 hearing.

If you still have too much money look into what you have not had money for and get it done.
Some examples:
home repair (if keeping house)
car repair/maintenance (again, if keeping car)
medical/ dental appointments
eyeglasses
stock the pantry (including cleaning and hygiene products)
pre-pay your heating bill for the winter
pre-pay insurance for 6 months


do not:
buy expensive furniture
buy tons of clothes
take an expensive vacation
try to hide the cash

There are many legitimate ways to use that money that will not come back to haunt you, look into what you NEED, and keep all the receipts.

[doomed]

Thanks, Maine. We're not keeping the house and only one of the cars.

As for the expensive vacations, well . . we just came back from one It wasn't paid for by us but friends of ours. They bought the tickets 6 months ago before we were even down this road and the tickets were non-refundable and I was too embarassed about the bankruptcy to tell them and back out. So obviously, we don't have airfare or hotel costs for this vacation, we picked our animals up from the kennel today to a tune of $400 because the person I spoke with MISQUOTED their rates significantly... UGH

[Maine]

Get that one car a check-up, pay 6 months of insurance on it, does it need tires soon? And try to get current on the payments.

You did not pay for the vacation, don't worry about that one.

Getting your animals from the shelter is a legitimate spend, don't worry.

[tobee43]

doomed...first....ur not doomed...ahhhhhhhh.....it does sound like we have similar situations....

after we were forced to stop paying because we filed we saved every cent.

now...we did not keep it in the bank due to the fact if we left the state because we were surrending r home and could not afford the heat for the upcoming winter months.

we were advised i must say 50 times to stop paying r bills...but i continued for months after we even left r house because of the guilt one feels...my husband lost his job....my health...what a mess...so i decided...once we stopped paying everyone other than the attorney put every dime away for r "new" to come lives. which is what we did.

since we JUST rec'd our discharge and trustee walking papers we really haven't begun our new lives just yet. we r still have problems with the house because although we surrendered it and the debt was discharged the bank refused to take our names off...another mess to deal with after the discharge...however, i'm trying to be pro active and get this resolved asap...and also filing a complaint with HUD and the FHA for the bank's abuse.

i just want you to know...after the crying, the guilt...the disbelief...it will be ok...promise.

[doomed]

Thank you so much, guys. Maine, we are up to date on all car payments and I'm going to be missing my first payment this month on the one we're not keeping ($500/mo)

Tobee, part of the reason I'm having a hard time getting a handle on things is because I've been of the understanding that saving money is NOT good at this piont, as you can't protect savings . . How did you manage this?

I'm so happy for you that you came through this okay

[tobee43]

by being smart doomed.....

i knew we had to start all over again. how could be do that when we took every dime we had for medical expenses and had nothing left. how could be go on if we didn't have a home....and we also surrendered the other car and kept the older one which was paid off.

we went to see a few attorney's all of them advised us to stop paying our bills and put the money away for when we really need it.

i resisted and refused and continued to pay my cc company's almost every dime i had...they had upped our % rates from 5-7 fixed to over 33%....what a waste of money it was trying to keep up. i must have paid them over 20k before the bankruptcy...little good that did us.

looking back i would have just "blocked" all the calls and put the money aside like the attorney advised to begin our new lives.

now we have so very little with a pension and ss for income. but it's enough for a roof over our heads, food on the table...renting a movie or two. and maybe...just maybe in about 6 months a chance to start really saving again. BUT without the little be WERE able to put aside we would have never been able to move and get a place to live...or get the utilities up and running etc.

just be careful...you can do this

[doomed]

toobee, I hope the next 6 months finds you living a happy life and saving!

[tobee43]

why thank you doomed...can you PLEASE change your name!! & i wish you the best of luck...keep in touch!!

[Maine]

hey doomed- if you figure out how to change your name let me know- I want a different user name too.

[horse]

We didn't know we were going to file for BK until we did it and within that 90 day period right before filing I paid around 5 thousand dollars to...our credit cards. :-)

[tobee43]

and maine...when YOU find out how to change yours...will you PLEASE let me know as well..