Getting rid of cash...

[leftyf]

Strange problem to have, but as I've mentioned in previous posts, I need to get rid of some cash before filing...my wife would like to buy a bunch of gift cards to various stores that we shop at and stockpile them for later. My view is that this is pretty risky business and would probably be noticed by a trustee...any opinions out there? I need to get rid of about $7K pretty quickly.
Thanks,
Lefty

[Keebler]

It seems to me that there's two ways to look at this.

If you have cash and the trustee will know you have cash because of some transaction, statement or record showing it; nothing short of spending it on legitimate living expenses will get by. You'll need to document where the cash went and it better not be for anything that smells of fraud like "I don't remember" or anything that could be considered a luxury.

If you have cash that there's no way for the trustee to be aware of, then you shouldn't do anything with it that the trustee can subsequently become aware of either. Quietly keep the cash or lose it and report as much or as little as your concience will allow.

[JRScott]

Your wife's plan won't work the Trustee will ask about it.

I know this is going to be hard but as the previous poster suggested you need to spend it on legitimate expenses.

When was the last time you visited the eyedoctor? If its been a while schedule appointments and spend money there.

When did you last go in for a checkup with a regular doctor? If its been a while schedule and appointment and spend money there.

Have you had the cars tuned up in a while? If not go get them tuned up.

Have you had the heating oil barrel filled this year yet? If not go check how much you got, if sufficient to place an order with your provider do so now don't wait. (cheaper to get it in the summer anyway...assuming you have an oil barrel )

You can also get money orders for rent/mortgage payments from the 7k if you need to as well. Just make sure to do it before filing. (Same with utilities).

Anything been neglected around the house? Like repairs etc? If so time to get some estimates and get that work underway.

[sickandtired8]

Strange problem to have, but as I've mentioned in previous posts, I need to get rid of some cash before filing...my wife would like to buy a bunch of gift cards to various stores that we shop at and stockpile them for later. My view is that this is pretty risky business and would probably be noticed by a trustee...any opinions out there? I need to get rid of about $7K pretty quickly.
Thanks,
Lefty

How about a new roof on your house, tires on your car, shoes on your feet, clothes, food, gas for your mowers, a new lawn mower, furniture, a few girft cards but nothing over $50 each I would think would not look bad, repairs around your house, new glasses or contacts, change the oil in your vehicles, do to the dentist, and last but not least, get a massage...with all this BK business, it is bound to help your back and make you feel bettter. S&T

[HHM]

How about, NOT spending it, and putting into and IRA. Retirements accounts are exempt assets and you are ALLOWED to transfer non-exempt assets INTO exempt assets.

[SinkingFast]

How about, NOT spending it, and putting into and IRA. Retirements accounts are exempt assets and you are ALLOWED to transfer non-exempt assets INTO exempt assets.

In order for retirement funds to be protected, the monies have to be invested into an ERISA qualified plan.

Generally speaking, Retirement IRA's are not ERISA qualified. So many Retirement IRA's are not exempt from the reaches of the BK Trustee.

It then falls to State Exemptions whether or not funds in a Retirement IRA are Exempt.

Depending on the State a filer lives in will determine if Retirement IRA funds are protected or not.

http://www.offshorepress.com/lawsuits/ap9410.htm

[reallynervous]

Would gift cards need to be listed as assets/property somewhere on the bankruptcy forms? If so, I am guessing that you would value them at the available balance?

We have a few (Cracker Barrel, Borders, etc) that have small remaining balances on them. I never even thought about them as we don't go out to eat or shop for non-essentials anymore.

Also as far as buying money orders for rent, etc, is there a limit on how many months worth you could do? We've managed to put together an emergency fund, however we may not be able to cover it with an exemption.

OP, isn't it strange to be trying to spend money to file BK? Dh's sales were really low this week and he was feeling down. I told him that his check being a little lower isn't a bad thing for us right now. Kind of crazy!

Do you pay your home & auto insurance monthly? Maybe you could pay it for the whole year instead (unless you need it as a monthly deduction).

reallynervous

[HHM]

In order for retirement funds to be protected, the monies have to be invested into an ERISA qualified plan.

Generally speaking, Retirement IRA's are not ERISA qualified. So many Retirement IRA's are not exempt from the reaches of the BK Trustee.

It then falls to State Exemptions whether or not funds in a Retirement IRA are Exempt.

Depending on the State a filer lives in will determine if Retirement IRA funds are protected or not.

http://www.offshorepress.com/lawsuits/ap9410.htm

The new BK code was fairly explicit in exempting IRA's. In any event, it does come down to state exemptions.

My basic point is, since we're talking about $7K and not some insignificant amount, look into ways to save the money in exempt assets, and not just spend it.

[leftyf]

Thanks for all of the advice. I'm talking with an attorney tomorrow and I am going to see if I can put it in an IRA. If I can't, then I am will try to get money orders for future rents...this one seems like I could get in trouble, but I"m not sure. Otherwise, I'll go get a few crowns I need for the teeth and figure out other ways to blow the cash. The last attorney I spoke with seemed pretty adamant about me not taking a vacation with the cash, but I've had others on the board tell me not to worry about that. We are not planning a dream vacation, just maybe a little get-away or two.

[JollyGG]

HHM's idea sounds the best. However if that doesn't work out.

Filing Fee
Hows the Roof?
How does your siding look?
How about new windows?
Have you had your furnace and AC cleaned and inspected?
Do they need replaced?
Hows the carpet or flooring?
How are the appliances looking? Stove, fridge, washer, dryer, ect.
a deep freeze and a butchered cow or/and pig (or if you live in a more urban setting a fell freezer.)
Dental work
Dr. appointments
Hows your bed? - new mattress
Stock up on non parishables - noodles, rice, canned goods, pantry items, garbage bags, cleaning suplies, toileties, paper products.
Do you need new clothes?
Do your kids need new clothes? Are your kids old enough that you can buy clothes several seasons ahead for the kids?

You would have to ask the lawyer on this one, but can you pay down student loans, or other non-dischargable debt. If you still have room under your state exemptions for equity can you pay down your mortage some?

[leftyf]

The house ideas are great...too bad I'd be improving my landlord's property. I sold my house about 2 months ago...couldn't really afford it anyway, but I'm wishing I had a house right now, especially since it looks like I'll be heading into a 13. Probably won't be able to get one for 5 years now, at least. I'm still working on a way to get a chapter 7 so I can finish this thing off "for good." I will definitely be paying a lawyer some small amount soon, but it sounds like most of them will build it into the payment plan so I don't think I should bother paying them since it will not, I think, reduce my monthly obligation to the trustee. I have two little kids who have a lot of donated clothes (from friends) and a big kid (20 years old) who should probably be figuring out how to buy her own clothes. Maybe I should go ahead and pay for her college for the next year or so? She will be going locally so we're probably only talking about $4K or so...I think that's a good one. My wife is also in school...I'm not sure how a trustee would look at a "prepaid" education? Any thoughts?
Thanks.

[leftyf]

Met with another attorney who said to hold onto the cash if I file a 13. He said it is a common misconception that you need to get rid of your cash when you are filing a 13. 7 may be a different story...does this sound right? The guy seemed pretty good overall.

[HHM]

Met with another attorney who said to hold onto the cash if I file a 13. He said it is a common misconception that you need to get rid of your cash when you are filing a 13. 7 may be a different story...does this sound right? The guy seemed pretty good overall.

LOL , you didn't mention in your original post that you were more than likely filing a chapter 13.

If you are filing chapter 13, then no worries. The only caveat is, your chapter 13 payment plan would have to provide at least as much as the amount of your available non-exempt assets.

[leftyf]

oh yeah...oops, minor point I forgot to mention. Actually, I am planning on filing a 7, but the attorneys are advising me otherwise. I am only about $5K above the median, so I can't figure out why they think it will be so difficult to file a 7? Guess I'll figure it out eventually, and I'm hoping it is not that they want me to pay them twice banking on the fact that I will convert to a 7.
Thanks,
Leftyf

[HHM]

$5k over the median with primarily consumer debts, that is a no brainer (sorry to say), you are going to have to file a Chapter 13.