Finally filed today... But question regarding $$$ in the bank

[oc714]

Called the lawyers office a few minutes ago and our case was filed today but my concern is that my husband and I just got paid. When I had asked the lawyer previously if this would be a problem to have Money in the bank he said "don't worry about this" . But I'm just so nervous about this whole thing, that I DO worry... I have 1/2 of my mortgae in the bank and wondering if I should just start paying some other things instead like Light bill and Car Insurance today. When I signed the petition the lawyer put that I had $900 in the bank but today we have about $2200.00.

[ScaredINMich]

What I did was pay extra (like double) on my utilities (electric, gas, cable/phone), paid an extra month on our life insurance that had just come due...those type of things that we will have to pay.

We filed with about $2500 in the bank, had our 341 with about $3500 in the bank with no problems, but we were able to exempt it.

[momofthree]

Are you filing using system 1 or 2? If you're using system 2 exemptions, then he can apply the large wildcard exemption towards the $ in the bank.

[debee]

Yes, if you can't exempt it, pay bills with it. Pay your mortgage now with it. Get rid of whatever you cannot exempt, or it belongs to the trustee.

[IHateToBeEmo]

Called the lawyers office a few minutes ago and our case was filed today but my concern is that my husband and I just got paid. When I had asked the lawyer previously if this would be a problem to have Money in the bank he said "don't worry about this" . But I'm just so nervous about this whole thing, that I DO worry... I have 1/2 of my mortgae in the bank and wondering if I should just start paying some other things instead like Light bill and Car Insurance today. When I signed the petition the lawyer put that I had $900 in the bank but today we have about $2200.00.

Since you filed bankruptcy today and you have $2200 in the bank today, I agree that it could be a problem. It's too late to "spend down" now. Hopefully your trustee will not want it.

[oc714]

Since you filed bankruptcy today and you have $2200 in the bank today, I agree that it could be a problem. It's too late to "spend down" now. Hopefully your trustee will not want it.

Well I'm hoping too but my lawyer was sure we wouldn't have a problem. Hope he is right. I did pay some stuff that are due soon and we will see what happens. My fingers are crossed.

[oc714]

Are you filing using system 1 or 2? If you're using system 2 exemptions, then he can apply the large wildcard exemption towards the $ in the bank.

We used System 2 and have a large amount we didn't need.

[debee]

edit: Just noticed OP can exempt it all anyway. So talk to your attorney and amend your schedule if necessary to include the highest balance.

[jwmc1]

Send it to you utilities and mortgage.

[dbc5150]

We were told that day you can only have 300 married and 150 if single in the bank the day of filing after that day it does not matter...

[debee]

It depends on how much you can exempt (case specific/state specific/federal) and also the trustee.

Technically speaking, whatever is in the account at the commencement of the case becomes part of the bankruptcy estate. Whatever can't be exempted is supposed to be distributed to the creditors.

OP heard that her case was filed but there's a chance the office sent out the email that it's "filing day" prior to actual filing it. In that case, any payments made beforehand would not be part of the estate and would not end up in the trustee's hands (presuming there was nothing avoidable). So there's a chance there for keeping the money.

Also, the trustee might not be inclined to look into the timing issue if the dollar amount is not that great and if the payments went to things like the mortgage, car insurance, etc. It's a gamble, but better than just letting the money go without putting up a 'fight'.

Luckily, OP has lots of unused wildcard and can cover the deposit that way so long as she amends her filing.

[LadyInTheRed]

We used System 2 and have a large amount we didn't need.

debee is right. Have your attorney amend your petition to correct the balance and exempt it. An amendment is simple and common and won't cause any problem. The trustee might not care anyway, but your petition should be accurate and you will have to say under oath at the 341 that it is or admit that it isn't.

[Dorsey]

I was under the impression that cash in the bank can be used to pay for living expenses and to stay current on mortgage and car payments. Is this not true? Certainly you can buy groceries, are you not able to pay the mortgage and car with cash that was in the account on the date of filing? Say you aren't working so there is no post-filing income, you must be allowed to live on something and I understood that cash in your possession and in the bank were accessible for living expenses. Does anyone have clarification?

[debee]

Technically speaking, any money in your bank account on filing day becomes part of the bankruptcy estate and unless you exempt it, it is available for distribution to your creditors.

There seems to be some variation from district to district in terms of how much has to be there to get the trustee interested. Some people are advised to keep their balances below $800, others below $150. If you have an attorney (or plan to get one) your attorney should know what you can get through with.

Otherwise, I would get it as low as possible BEFORE filing by paying living expenses as you describe in your post.

[Dorsey]

Let me restate it: I have nearly zero balances in my back accounts. In fear of offsets I removed the deposits as cash prior to filing. I have cash listed as an asset on my schedules, etc. I was under the impression that I could use that cash (since I am not employed and have no income) for living expenses. I have decided not to pay the mortgage or car loan while in bankruptcy (for fear of providing preferential treatment to creditors. I will not reaffirm the mortgage, but I will reaffirm the car loan) But I am spending cash on groceries and fuel, etc. and I was under the impression that this was appropriate. Your thoughts?

Also, I am energetically seeking employment. I filed for bankruptcy protection on April 22, 2011 and the 341 hearing is June 1 with an anticipated discharge on Aug. 1. There is no presumption of abuse and this is a no asset case. If I find employment, what are the implications of me taking a job prior to the 341 hearing or before the discharge? Does such new employment prior to the 341 hearing require me to amend my forms and possibly amend the Form 22A (with the possibility of failing the means test due to the new income)? Understanding that one of the questions the Trustee will ask me during the 341 hearing is if the paperwork I filed to-date is still accurate, it would be difficult to say "yes" if I has just landed a job after filing, but my paperwork says I'm unemployed and I don't anticipate and changes to my financial situation. Thoughts on that?