Not Making House Payments...

[BKINAZ]

what about the money you "make" or save by not making those payments...how do they effect your chapter 7?

I mean if we don't make six months worth of house payments we are like $15,000 ahead...I'm thinking that screws us when we go to file 7 does it not?

[HHM]

Correct.

In a chapter 7, cash is an asset...and usually a non-exempt asset. Thus, if you file chapter 7 and have $15K in the bank, that money will go to the trustee. You need to spend that money before you file chapter 7 (look for other threads that discuss how exactly to spend that money so as not to jeapordize your BK).

[hopefulbk]

What if that money never gets to the bank because you cash it at the bank it's drawn from or somewhere else?

[HHM]

You still need to spend it. I cannot recommend that you commit bankruptcy fraud by "hiding" the money.

[hopefulbk]

You still need to spend it. I cannot recommend that you commit bankruptcy fraud by "hiding" the money.

I get it.. so then how are you suppose to save up for a new place (deposit, first/last month rent)? I mean some places are ridiculous and want $3K up front~ that is money they can take-right? I don't "get" that part.

If I have to exempt my next year tax refund, then I'm already 1/2 way there in my exemption. My household goods make a good portion of it so what about my future rent or car expenses? Can someone clarify? I'm losing my mind here..

[HHM]

You get the new place BEFORE you file BK.

Bottom line, you have to spend it, or it goes to pay your creditors in BK.

Big Picture time...you are filing BK and wiping out your debts, there are costs to getting that benefit.

[myhearts07]

Oh Crap!!! We have about $5K in our savings account but $3975 is our tax return (we file joint, so I hear 1/2 would be exempt because I am not filing)-- is that true? and will they take the rest?

Thanks
Hearts

[OKBK]

People on here are not going to tell you to save money or commit BK fraud. You know what you have to do. Cash is King!

[BKINAZ]

People on here are not going to tell you to save money or commit BK fraud. You know what you have to do. Cash is King!

We...well I get that, but my question mainly centered on the means test. Sure I can spend it on my lawyer, life insurance premium for a year, and other things...but does it go for income in regard to the means test? Or is the means test just a nuts and bolt q & a? How much do you make, what are you debts? Vs...How much do you make, what are your debts and how much do you have saved from not making payments?

[beachymama]

Can anyone link the threads which identify how to get the money out of the account? I am scared that a creditor will clean out my bank account or freeze my bank account or garnish my wages that go to my bank account.

Thank you! Oh, I have not filed yet.

[lrprn]

I am scared that a creditor will clean out my bank account or freeze my bank account or garnish my wages that go to my bank account. Thank you! Oh, I have not filed yet.

Go open a new account at a new bank. Redirect automatic deposits to your new account. Leave 5 dollars in your old account. Don't tell any creditors about your new account and DO NOT set up any auto-payments out of that account. That solves your problem.

[MiSSMaGoo]

We...well I get that, but my question mainly centered on the means test. Sure I can spend it on my lawyer, life insurance premium for a year, and other things...but does it go for income in regard to the means test? Or is the means test just a nuts and bolt q & a? How much do you make, what are you debts? Vs...How much do you make, what are your debts and how much do you have saved from not making payments?

I was able to put down a $1300 mortgage pymt on my means even though i wasnt paying it and it was never an issue... means test is your living expenses versus your income. Your living expenses need to exceed your income and even though you're not paying your mortgage you still put it in. I did and my lawyer never said any different and knew the situation from the start and I had my 341 on March 12th and everything seems to have gone smooth.

[StartingOver08]

I was able to put down a $1300 mortgage pymt on my means even though i wasnt paying it and it was never an issue... means test is your living expenses versus your income. Your living expenses need to exceed your income and even though you're not paying your mortgage you still put it in. I did and my lawyer never said any different and knew the situation from the start and I had my 341 on March 12th and everything seems to have gone smooth.

MiSSMaGoo, this varies by district. I was not allowed to use my mtg payment because I had not made my mtg payment for 4 mths before filing. I had to use the 'rent' payment allowed for my district for my household size. That payment was 25% of my mtg pmt. Each district is different.

[fatal1124]

I agree with the new acct idea

[discouraged]

I set up a new account and also have money at home. I have kept all receipts to verify what I am spending on the 'at home' money. I use that just as I would a checking account, except I buy money orders.

You should see a lawyer as there may be exemptions you can use for some of the money. It was my concern also because I was not paying my mortgage but, I own so little and most of my debt is house debt. We were able to use the federal guides and could exempt the money I do have. (It's not that much - just a couple thousand)

I told my lawyer though, I am just so appreciative of getting out from under my debt that the trustee can have whatever he/she wants. So if they want the 'house' money, they can have it. It's a lot less than the 100,000 they are helping me get rid of.

My lawyer did advise me to spend some on necessary consumer items so I bought a new mattress (desperately needed), stocked up on groceries and non perishable items, tp, paper towels, laundry soap, toothpaste, etc. I also bought some clothes.

You can also make sure your car is in decent shape, new tires, battery, etc. These are just some of the things. Try to think of items you use that are normal consumer items and stock up.

And, try to keep in mind the debts you will be discharging as opposed to what you may be giving the trustee. And contact a lawyer to see what can be exempted.