What can we, and can we not do between filing, the 341, discharge and after?

[murphsmom]

Trying to make sense of all of this, regarding our bank accounts, spending now, soon and after discharge, etc...

The same bank hold my Visa CC account, and my Visa Debit checking account. I use the checking account to cash my checks, take $ out of the atm and pay for things like lunches, groceries, online bill pay, etc.... Stopped paying the Visa CC bill this month.

I know enough not to touch the credit card. But, I'm assuming the trustee will want to see my checking account statements (how far back will they want?). I am $400 in overdraft right now on the checking account, which is covered by the bank and I can make small payments on. What happens to the overdraft amount if I claim bankruptcy? Can I or should I reaffirm that overdraft debt in order to keep the checking account? Or list it, hope for a discharge, and open a new account at a different bank?

I've gotten two commission checks totaling about $1700 over the past 3 weeks. I cashed them both because each time we were literally one or two days away from filing, but then something came up and we ended up waiting. I spent that $ on groceries, necessities, birthday gifts, gas, rental tux for my son for Sr. Ball, and gave my husband some cash to put into his account to pay bills with.

I want to be very very careful with any spending or red flags that may cause an issue with the trustee. On the day of filing we will have almost a zero balance in the account. But, what happens if I get a payroll check a few days after we file? Can I deposit that and pay bills with it? Should I cash it and pay bills in case the bank claims it toward the overdraft amount?

So then we wait... spend only on necessities, bills, etc... We have the 341, then wait another 60 days doing the same, correct? Pray for a discharge after 60 days. Will we need to keep receipts for ALL spending after we file and before discharge, or just above a certain dollar amount?

OK so say it gets discharged, and if so, for how long after discharge should we be extremely careful with our spending habits? I'm afraid to go out for a $50 dinner right now because I don't want it to cause any issues, etc... what would the reasons be for a trustee to monitor bank accounts after discharge?

Again, sorry for my ignorance, I thought I knew alot until I came to this forum. You all are a wealth of information, thank you.

[daylate]

Relax. You can spend 50 on dinner. Not every day but once isn't going to be a problem. You shouldn't spend 10k on a vacation but a night out to the movies and dinner is ok. After discharge you should be careful but there is no legal reason to. Save up your first 10 paychecks and go wild-not a problem from a bk perspective but it is a long time before you can file again. Ok, that was a bit of gallows humor but seriously once you file and especially after you are discharged life can go on with out worrying about a trustee. As long as you were honest and fully disclosed everything up front there will be no problems after wards. I think there are three instances where the trustee might be interested after the fact-inheritance is one, I can't remember the other two but I'm sure someone will

[debee]

The same bank hold my Visa CC account, and my Visa Debit checking account. .... Stopped paying the Visa CC bill this month.

I wouldn't put any more money into this bank. I don't know much about the "right to set off" but I believe since you owe them money they can access whatever you have on deposit in your checking account.

I believe the consensus wisdom on this is to open a new account.

But, I'm assuming the trustee will want to see my checking account statements (how far back will they want?).

It varies. Six months is common. If they have reason to be curious about your affairs they can go back a lot further. I answered this in the other thread ...

I've gotten two commission checks totaling about $1700 over the past 3 weeks... gave my husband some cash to put into his account to pay bills with.

Make sure your lawyer knows all this.

But, what happens if I get a payroll check a few days after we file?

Live normally. No need to keep receipts for anything AFTER you file.

OK so say it gets discharged, and if so, for how long after discharge should we be extremely careful with our spending habits?

Live normally.

... what would the reasons be for a trustee to monitor bank accounts after discharge?

Noone will be monitoring your accounts. If the UST suspects you of committing fraud and your account activity post-bk will provide evidence to that effect, then they might want a look-see.

As was already mentioned, if in the 180 days after filing you receive an asset ...

(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit plan.

then the trustee is entitled to it.

I agree with daylate. Relax.

[ValleYum]

Trying to make sense of all of this, regarding our bank accounts, spending now, soon and after discharge, etc...

I know enough not to touch the credit card. But, I'm assuming the trustee will want to see my checking account statements (how far back will they want?). I am $400 in overdraft right now on the checking account, which is covered by the bank and I can make small payments on. What happens to the overdraft amount if I claim bankruptcy? Can I or should I reaffirm that overdraft debt in order to keep the checking account? Or list it, hope for a discharge, and open a new account at a different bank?

BEFORE you close this account and/or lose your online access, make sure you get/print/save copies of all your statements. I have read where folks have had a super-difficult time getting statement copies after filing BK and/or they have had to pay exorbitant amounts to get them.

Just a thought.

[debee]

Good point, VYum.

[murphsmom]

Thanks everyone, great advice. I will print out all my bank account statements. No fraud has been or will be committed, I'm nervous enough as it is, can't imagine committing fraud. Besides, there literally is nothing of value to lie about.

The $1700 in commission checks fall under my normal yearly "payroll", which is actually under the $3000 per month we are claiming as my income. But, I will make sure the attorney knows that we cashed those checks and paid cash for our living expenses. It's amazing how fast the money goes in this economy, it's like we're bleeding out money, for goodness sake. I'm paying $600 a month just for gas, not including what my husband is paying. Don't even get me started on our grocery bill, two teenagers plus my niece living with us, and all they do is eat.

Thank you again for calming my nerves. I think our case is pretty straight forward, no assets, nothing of value except what falls under the exemptions. I will relax and breathe and trust our attorney.

[Clabbergirl]

Get a new checking account at a bank you do not owe money to in any way, shape, or form. Immediately. When your bank realizes you've listed them on your credit matrix, even if you plan to pay them, they will likely take out whatever you owe them all at once. It's easier to get a checking account before you file BK also - some banks do not check credit reports anyway, just ChexSystems.

Seriously - get a new account and don't take a chance with this. Once things are settled, you can always go back to the original bank if you really need to.

[IamOld]

Hello debee - not to be morbid, but I thought life insurance proceeds were exempt - or is that state specific? IN my state the state exempts it...not planning on kicking the bucket but...

I wouldn't put any more money into this bank. I don't know much about the "right to set off" but I believe since you owe them money they can access whatever you have on deposit in your checking account.

I believe the consensus wisdom on this is to open a new account.



It varies. Six months is common. If they have reason to be curious about your affairs they can go back a lot further. I answered this in the other thread ...



Make sure your lawyer knows all this.




Live normally. No need to keep receipts for anything AFTER you file.



Live normally.



Noone will be monitoring your accounts. If the UST suspects you of committing fraud and your account activity post-bk will provide evidence to that effect, then they might want a look-see.

As was already mentioned, if in the 180 days after filing you receive an asset ...

(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit plan.

then the trustee is entitled to it.

I agree with daylate. Relax.

[IamOld]

clabbergirl is VERY VERY right! Just stay AWAY from Wells Fargo/Wachovia - they freeze accts even if you do not owe them anything! I think folks here would suggest a SMALL local bank (even if you live in NYC or vicinity there are still the such) or small/local credit union.

Get a new checking account at a bank you do not owe money to in any way, shape, or form. Immediately. When your bank realizes you've listed them on your credit matrix, even if you plan to pay them, they will likely take out whatever you owe them all at once. It's easier to get a checking account before you file BK also - some banks do not check credit reports anyway, just ChexSystems.

Seriously - get a new account and don't take a chance with this. Once things are settled, you can always go back to the original bank if you really need to.

[IamOld]

Murphsmom - re groceries - I have four people total - I cannot CANNOT get grocery bill under $800/900/month. And we buy store brands only - I go to the lowest priced store and tried ALDI"s (pretty nice actually although their hamburger patties are...ok not worth it...mostly water) and I cannot get under 200/week. Impossible. I mean four or five apples!!! will run you like 4 or 5 dollars. If you live near NYC, Western Beef is great (not just beef, but any meats, veggies, and other stuff - truly far less than any other supermarket I've known. Sadly, live nowhere near one now :-(

Thanks everyone, great advice. I will print out all my bank account statements. No fraud has been or will be committed, I'm nervous enough as it is, can't imagine committing fraud. Besides, there literally is nothing of value to lie about.

The $1700 in commission checks fall under my normal yearly "payroll", which is actually under the $3000 per month we are claiming as my income. But, I will make sure the attorney knows that we cashed those checks and paid cash for our living expenses. It's amazing how fast the money goes in this economy, it's like we're bleeding out money, for goodness sake. I'm paying $600 a month just for gas, not including what my husband is paying. Don't even get me started on our grocery bill, two teenagers plus my niece living with us, and all they do is eat.

Thank you again for calming my nerves. I think our case is pretty straight forward, no assets, nothing of value except what falls under the exemptions. I will relax and breathe and trust our attorney.

[debee]

Hello debee - not to be morbid, but I thought life insurance proceeds were exempt - or is that state specific? IN my state the state exempts it...not planning on kicking the bucket but...

That list in my other post comes from 11 USC 541. It's everything that becomes property of the bankruptcy estate if rec'd within 180 days of the filing date. So the trustee has to be informed. Whether or not the debtor will be able to exempt any of the proceeds is not only state specific, but case specific. So in those states where the exemption allows for whatever is "reasonable and necessary" for the support of the debtor and her family, there is a lot of judicial discretion. If there's a plainly stated ceiling, like "up to $10, 265 in insurance proceeds" then that much can be exempted. But all of it is property of the estate.

The material point in that post was that the debtor didn't have to worry about her earned income post-filing. Noone would be paying attention. But if she came into the kind of money listed in 541, different story.

[IamOld]

Thanks!!! Then it is the state exemption then because in my state group and other life ins proceeds - regardless of value - are exempt...just making sure...because if I kick the bucket w/in the 13 I sure as heck don't want it to go to anyone but my family.

That list in my other post comes from 11 USC 541. It's everything that becomes property of the bankruptcy estate if rec'd within 180 days of the filing date. So the trustee has to be informed. Whether or not the debtor will be able to exempt any of the proceeds is not only state specific, but case specific. So in those states where the exemption allows for whatever is "reasonable and necessary" for the support of the debtor and her family, there is a lot of judicial discretion. If there's a plainly stated ceiling, like "up to $10, 265 in insurance proceeds" then that much can be exempted. But all of it is property of the estate.

The material point in that post was that the debtor didn't have to worry about her earned income post-filing. Noone would be paying attention. But if she came into the kind of money listed in 541, different story.

[debee]

...because if I kick the bucket w/in the 13 I sure as heck don't want it to go to anyone but my family.

The proceeds from your life policies won't become property of the bankruptcy estate at all and won't need to be exempted or analyzed. Your named beneficiaries (of life insurance policies) are completely beyond the reach of the trustee.

If you were to inherit a policy from your Uncle Buford, then it does become property of the estate. Even though technically in your state a person can exempt life insurance proceeds, if you were to inherit a million dollars tomorrow and you were in a chapter 7, I would expect the UST to object on the grounds of "totality of circumstances". So then there is no need to exempt it, you just lose your discharge and pay the debt off yourself.

edit: I'm not a 13 person so I don't know how an inheritance would impact your plan. I don't know anything about 13s. I leave that to my betters.

[IamOld]

Thank you debee!!!!! Sorry - there's no Uncle Beuford :-) Just me...I actually lost a few policies I used to have come out of my former paycheck - I have about $250K from work now, but I need to get another 100 or 200K so that's what I'm working on now...

The proceeds from your life policies won't become property of the bankruptcy estate at all and won't need to be exempted or analyzed. Your named beneficiaries (of life insurance policies) are completely beyond the reach of the trustee.

If you were to inherit a policy from your Uncle Buford, then it does become property of the estate. Even though technically in your state a person can exempt life insurance proceeds, if you were to inherit a million dollars tomorrow and you were in a chapter 7, I would expect the UST to object on the grounds of "totality of circumstances". So then there is no need to exempt it, you just lose your discharge and pay the debt off yourself.

[debee]

Life insurance is so important. That was one of the things we neglected in order to make sure we could stay on top of our bills. I can't believe how stupid we were. I look back at that now and just thank God that neither of us died. Anyway, good for you that you're investigating your coverage amounts/needs and taking care of that.