What to do with cash?

[chrisld]

We're in the process of working with an attorney to file. So far he says he's 95% sure we'll be able to do a Chapter 7.

Thanks to all this government cheese ($3900 from "Families First" bailout, $800 per week unemployment for my wife, and a $9000 grant from SBA) we're sitting on more than $15k in cash we didn't have 6 weeks ago. If it weren't for the pending bk, I'd pay off a couple debts. I know if I do that now, it will be seen as a "preferential transfer".

What happens to cash in a bk? Do they take all but a small amount? If so, what is that amount? Is there anything "legal" we can spend that on now without raising suspicions, such as filling the chest freezer with groceries, etc? I don't want to hide it or do anything underhanded, but I also don't want to just let it sit and later have someone say "oh you could have ________!"

[justbroke]

Let's leave the $9K SBA grant aside for the moment as I believe all money under the CARES Act is not "income" for purposes of bankruptcy. That's a question that your attorney would need to answer because it "may" depend on the organizational structure of the business that obtained the SBA EIDL/PPP money.

Additionally, I don't know the impact of the CARES Act modifications to the Bankruptcy Code which excludes certain payments, received under the Act, and the money you would have remaining.

Also, you must look specifically to Minnesota's bankruptcy exemptions -- or the Federal exemptions if those are allowed -- as to what can be protected just using statutory exemptions. Minnesota has some exemptions that are good, but you have to choose the Minnesota exemption scheme, or the Federal exemption scheme. A lot will depend on what types of property you are trying to protect and which scheme works best. This is something an attorney will help you decide.

If you don't own a home, then the Federal may be better (especially if married) because the unused homestead exemption is $23,675 for each debtor (and can protect cash up to $11,850 for "any other purpose").

Since you are already working with an attorney it's best to use their suggestions; especially if they want you to "spend down" the money (and I'm not talking about the SBA grant under EIDL/PPP because those are special cases).

[bkandhappy]

if the 3900 stimulus check they dont touch it. The rest i am not sure.