Spend Down Before Filing

[Throwaway92]

Hello All,

I am planning to file bankruptcy sometime in May and I am having trouble figuring out how to spend down my money in order to not have it taken by the trustee (Chapter 7).

I am awaiting a tax refund that will be $4200 and I expect to receive this in the next couple of weeks. My lawyer has told me that I can prepay rent and other necessities to spend down my money but that still may not be enough.

any ideas on what else is a justifiable expense? For example I need some new furniture to replace damaged furniture but I don’t know if that is seen as necessary. Also, is there a certain amount of months I can prepare for rent without objection?

I am in CO and my lawyer has advised its best that I have less than $4000 in my accounts when filing (that’s what is exempt from what I’m told).

[justbroke]

Food is a good thing to purchase. If you have a deep freezer, or sufficient freezer storage, buy some long-term storage items such as meats (if you're carnivorous), vegetables, etc. Can also stock your pantry with some things. Go and get any postponed non-elective medical treatments (dental services is an example). Fill your gas tank. But new tires or fix your car (repairs, not upgrades).

Personally I would not buy new furniture. When you buy physical items, they become assets! So the old furniture is worth $100, but you buy new furniture and now you have a $2,000 asset or more!

Just run it by your attorney, but I would consider those to be necessary items.

[Carmella]

I agree spend the money on something other than furniture. If you haven't been to the dentist go if you need dental work pay for it. If you need glasses get your eyes checked and buy some glasses or contacts. Or get diagnostics done on your car if there's a problem looming or they say you'll need this fixed soon get it fixed now.

I am not an attorney so my advice is not official. You can always ask your attorney is spending the money on a car repair is an OK expense. And I think furniture would not be seen as "necessary" as your health or your transportation. And if you spend that money now on these necessary items that might free up some of your future income that you can then use on furniture.