can i spend money now?

[brokeNconfused]

WE GOT our tax return of 1k. I bought another car that is 10k cheaper than what we owed on our last one ( plan on letting it go back) Payment now went from 600 a month to 250 a month. My attorney said this would be ok. With that and not paying as many bills. I am still paying some, long story. I have ended up with a bit extra money. I have bought about 300 in work clothes. pants ties etc. from Walmart. Stocked up on groceries, bought some house paint and a few games and videos for my kids. My question is, as long as i am not using my cards is this ok? if i dont spend it will they take it all during bankruptsy? I retained an attorney yesterday and thats when i got my car. She said i qualify for a 7, but suggests i do a 13 for 2 reasons.
#1 creditors will be happy to get something
#2 my house has no equity and is on a 3 year arm that kicks in on june 2010. I want to refinance to lock the interest and a 13 will let me do this within the first year or 2.

what are luxury items? my paint? If i bought items to fix up yardlike grass seed, feralizer etc is that a no no?

[One Half Full]

I cant say for sure because I am not a lawyer, but I believe you are given certain exemptions for year on the amount you spend on clothing, house maintainance. I'm allowed to spend something like 150.00 on clothes per month without the judge thinking that I am spending "too much." There are probably specific laws for your own state.

I am in a similar situation. I was paying nearly 100% on basic bills, and I will be losing my car and house so I am not paying those bills. My lawyer advised me to "save" for paying her and a new car, and moving expenses and so on. I was really worried that the extra money would be seen as "profit" when actually, it will be spent once I move into a new place.

[brokeNconfused]

im not using my cards because i dont want them to think i am using them fraudulently since i plan on filing bankrupsty. between groceries and clothes since January i have spent a total of 1k or less. I live in Washington state and not sure about exemptions. I have not filed, just consulted and retained attorney so she can talk to my bill collectors until i get all the information together.

[ssdsco]

WE GOT our tax return of 1k. I bought another car that is 10k cheaper than what we owed on our last one ( plan on letting it go back) Payment now went from 600 a month to 250 a month. My attorney said this would be ok. With that and not paying as many bills. I am still paying some, long story. I have ended up with a bit extra money. I have bought about 300 in work clothes. pants ties etc. from Walmart. Stocked up on groceries, bought some house paint and a few games and videos for my kids. My question is, as long as i am not using my cards is this ok? if i dont spend it will they take it all during bankruptsy? I retained an attorney yesterday and thats when i got my car. She said i qualify for a 7, but suggests i do a 13 for 2 reasons.
#1 creditors will be happy to get something
#2 my house has no equity and is on a 3 year arm that kicks in on june 2010. I want to refinance to lock the interest and a 13 will let me do this within the first year or 2.

what are luxury items? my paint? If i bought items to fix up yardlike grass seed, feralizer etc is that a no no?

Your attorney's reasons for a 13 instead of a 7 make no sense to me. Generally you always want to do a 7 if you can. #1 is not a reason, pretty funny however.

If you're talking about spending cash and not credit just make sure you get something of equivalent value for the money and keep the receipts.

If you didn't retain this attorney already I'd consult with a few more.

[brokeNconfused]

i did retain. I have to refinance my house in a year. with a 7 i wont be able to qualify. I am getting clothes, easter items for kids and such. what happens if i make 300 dollar purchases at stores like walmart each month from bank accont and dont save reciepts?

[ssdsco]

i did retain. I have to refinance my house in a year. with a 7 i wont be able to qualify. I am getting clothes, easter items for kids and such. what happens if i make 300 dollar purchases at stores like walmart each month from bank accont and dont save reciepts?

Hopefully one of the experts will jump in and confirm the house issue.

The $300 cash purchases and receipts seems to be a local custom so that's a good question for your attorney. A few $300 purchases at Walmart without receipts in the months leading up to BK wouldn't be a problem in my area.

[yak411]

If your home has no equity now aren't you taking a gamble by thinking that your home will increase in value enough before the ARM kicks in? It will have to increase in value if you plan to refinance and I am not sure that will happen in our current market.

[brokeNconfused]

i talked to FHA and was told i need only 10% equity to RE-FI. Its a 5 year arm and im init about 2.5 years now. So i will have enough by then, i think.. LOL now you got me wondering. LOL

[Cali]

You might have been able to exempt a lot of those funds before you spent them. Or do as you are doing and buy items that are disposable but needed and are not luxury items. You wont have to account for money less then $600 spent. Unless you spend $600 several times a day on items and or several times a week. So spending $1K and having some receipts to show it was on living items and needed items. Just keep the receipts in case the trustee asks.

I guess I just wonder why your not using your cards to pay/buy living expenses before you file? I would have kept as much cash on hand as allowed based on my exemptions.

I thought you couldn't use your CC if you are going to file BK.