Question about large amounts of cash that I can exempt...

[hopeforus]

ok I didn't think anything of this because here in Wisconsin we can use the unused homestead exemption. We currently have 3 judgments against us, two in my husband's name and one in mine. His is actually from a really nasty firm in Minnesota that I learned about after googling them. Scary people they are...

We are filing soon. Finally. I wanted to wait until I received my financial aid refund and our tax refund so that I can just exempt what we already have instead of worrying about the refund being held up after filing. With the judgments though we have started keeping our money out of the bank. Not to hide it from the trustee though since we plan to disclose exactly what we have in our safe and will have all the ATM receipts and receipts from paying rent with money orders etc. We just really can't have our bank account seized. We actually have VA payments that get direct deposited in there and we know that in our state we also can exempt 5k for each of us from bank garnishment. BUT... what we also know is that we don't trust them actually releasing our money in a timely manner or not screwing it all up. I can't risk us not having our money to pay the rent or anything that our two special needs kids need.

If we are able to exempt all of this cash... will they care that we have been purposely keeping it out of the bank? I was reading on another thread that it is fraud to keep it from creditors... but it doesn't seem to make sense to keep it in the bank where it can most likely be seized and held up for weeks at a minimum... even the VA and my son's SSI money.

We'll be getting back about 11k total in taxes. I have a new bank account that that is being deposited in... and it doesn't look bad I wouldn't think because this was actually an account that was set up through my university to have my refund deposited onto their card. No bank fees so I want to switch and I just ordered checks too.

I'm considering just keeping the taxes in that account and being prepared to file soon after. I just get so nervous about a levy. I can't remove it all at once anyway. Can only cash advance 2500 of it a day using my debit card and going into a bank.

I guess I'm just really nervous now. we aren't trying to hide assets as it will all be disclosed. We are allowed to exempt it so does it really matter if we are keeping it safe from a bank garnishment? We aren't required to just keep it in the bank knowing we have a judgment are we???

Thanks.

[tcreegan]

Hi hopeforus,

There are a lot of folks keeping $$ out of banks b/c of judgment collectors. We did, no problems. Seen more than a handful here on the forum open a new acct right before BK b/c they have a credit card at the same bank their acct was in.Trustees must see this all the time. As long as you disclose everything on the BK paperwork, no fraud.

Hang in there!

Tom in Colo

[hopeforus]

Thank you so much! That is what I thought... but then reading something on here made me doubt everything I've been doing. It was about how you don't want to say that you've been keeping cash out of the bank in order to keep the creditors from getting it because that is fraud, esp if you have a judgment. So what do you guys tell the trustee as the reason why you don't use the bank anymore and keep a bunch of cash out?

[momofthree]

I'm guessing you're using the wildcard offered by the Federal Exemptions? Note that this amount is up to $10,125 of your unused homestead exemption, so you'll want your total cash on hand to be less than that amount. With regular wages & your large refund, you'll need to watch the numbers carefully as you get close to filing.

[hopeforus]

Also to add onto this... because I see a lot of contradicting things on here about this... when we get our tax refund I plan to go out and buy a new mattress because I really am sick of waking up with my hips yelling at me. I also need to get blinds for the windows that don't have them and need to set up a security system to keep my kid with autism safe. It's something we have been needing to do but didn't have the money to do it. He's 10 and wants to get out and with it going to be getting nicer soon... it's a real fear. Since we can exempt this cash ANYWAY... does it matter if we spend it? What about if we got something for pleasure? Can't think of anything right now but what if I wanted to put the deposit down on a birthday party for my daughter... is that bad or is it ok because we can exempt the cash to begin with? That is what I'm really confused about.

[hopeforus]

I'm guessing you're using the wildcard offered by the Federal Exemptions? Note that this amount is up to $10,125 of your unused homestead exemption, so you'll want your total cash on hand to be less than that amount. With regular wages & your large refund, you'll need to watch the numbers carefully as you get close to filing.

Yes. If we buy our mattress and other things we need to make our house safe for our son then it should be ok.

But aren't all amounts doubled anyway for married people?

[daylate]

If you are filing jointly that (doubling) is my understanding.

[keepmine]

Thank you so much! That is what I thought... but then reading something on here made me doubt everything I've been doing. It was about how you don't want to say that you've been keeping cash out of the bank in order to keep the creditors from getting it because that is fraud, esp if you have a judgment. So what do you guys tell the trustee as the reason why you don't use the bank anymore and keep a bunch of cash out?

This isn't fraud in any shape form or fashion. No law requires you to have a bank account.
The only way fraud could come into play is, if you received interroggatories concerning a debtors exam and didn't disclose the cash holding or, you didn't disclose it on your bk paperwork.
As long as your trustee is informed, he/she could care less.

[hopeforus]

I know I'm not required to have a bank account, but I didn't know if it looks bad to have a bank account and that I have used the bank account but now all of a sudden I'm keeping about 12k in my safe O.o Obviously I'm trying to keep it away from the judgment creditor and I didn't know if it was ok to say to the trustee "Yes I have all of this cash because we have judgments and we don't want the creditors seizing it from our bank account". But won't they *know* that's what we are doing? Do they not care?

[keepmine]

I know I'm not required to have a bank account, but I didn't know if it looks bad to have a bank account and that I have used the bank account but now all of a sudden I'm keeping about 12k in my safe O.o Obviously I'm trying to keep it away from the judgment creditor and I didn't know if it was ok to say to the trustee "Yes I have all of this cash because we have judgments and we don't want the creditors seizing it from our bank account". But won't they *know* that's what we are doing? Do they not care?

You're making a mountain out of a molehill.
As long as you're truthful on your petition, the trustee could care less how you handle your personal finances.
If he asks why you're on a cash basis, tell the truth. you couldn't risk a judgment creditor freezing your account.

[hopeforus]

I wasn't even worried about it until I saw a post talking about how moving money around to avoid creditors can be seen as fraud. I'd rather give up all my money than risk being accused of fraud so wanted to make sure haha. Thanks!

[hopeforus]

I also need to buy a computer for the kids. DH and I are both full time students and are always on ours doing homework. My oldest has all these assignments that she has to work on at night... of course they need to be done on the computer, which really stinks because she can't use ours at that time. I'm thinking of getting them a desktop to share. Or just getting her a netbook. Of course these can be exempted anyway, and it's for a good reason so I shouldn't worry eh.

[discouraged]

My lawyer advises only keeping a minimum amount in the bank, $10-20. I have to keep $50 in to get all the benefits but it is a small bank so not worried. I'll keep $10 in Wells Fargo and let them find that. They can have the $10!

[hopeforus]

is that to avoid a bank garnishment?

[discouraged]

So creditors can't put a lien on your money.