$157,000 IRS Refund Coming

[NoLawyerYet]

whats the best way to cash this refund check? I'm gonna owe millions when my RE deal goes south, so $157k isn't gonna do much. Can I deposit it, and take out a little at a time for living expenses?

[keepmine]

With that sort of cash, you're going to have a complicated bk. You won't be able to exempt nearly that much.
You need to speak with a lawyer about asset protection well before filing bk.

[catleg]

Spend it, spend it, spend it

Are you in a homestead state? Can you move to a homestead state? That might allow you to protect 125k of it.

Actually, you may want to figure out a way to protect it consistent with being judgment proof, that might allow you to buy enough time to satisfy the residency requirement for a homestead state (what is it, 2 years?)

[Trixie007]

If it won't do much for you... you could send it to me! What a problem to have lol. I know, I know... it's all relative.

[BillyRip]

Well... If you're still going to owe millions, I only need about $60K to settle $90K in debt.

[NoLawyerYet]

I do live in FL, but i'm going to need the money if i'm going to get something else started. just not sure what yet?

[ansky0007]

Hate to tell you this but I highly doubt you will keep any of it to start any other business. Once you file this will become part of the estate. Even if you file months later and spend it they can still come after anything you spend it on.

[jribe]

whats the best way to cash this refund check? I'm gonna owe millions when my RE deal goes south, so $157k isn't gonna do much. Can I deposit it, and take out a little at a time for living expenses?

are you kidding?! I've seen some of your other posts, and i hope you're for real. Not to be rude or anything, but i read about the Amex questions where you weren't completely honest, and then the 30k car that is "mom's". Is there something you are trying to accomplish here?

[Never_Again]

I hope you are for real as well... I sit here and scratch my head on some of these posts.

As you have been told on some of your other posts, you really need to hire a lawyer, and tell him everything. Some of your assets may be able to be exempted. Others, you won't, and will just have to surrender them. He can tell you best. He can also tell you what is fraud, what is not, and how to "stay out of jail." Pre-bankruptcy planning is perfectly legal, and a good idea. Milking the system to commit (not so) borderline fraud is not.

Also, bankruptcy is NOT about a person being able to keep all of their assets, and screw the creditors for everything. It is about a legal fresh start. The laws of your state allow certain assets to be exempted, in the interest of that fresh start, but everything else is thrown into the pot to satisfy whatever can be satisfied of the debt.

There are some on this board who may disagree with me, and that is fine.

[JoeBankrupt33]

Wait a minute. Why are you trying to screw AMEX out of 5K when you are getting a 157K refund from the IRS. This all sounds fishy. And, I'm sure the 30K car that your "mom" owns is paid off and you're just hiding it.

It is frustrating to me whenever I get on this board and people talk about fraud or even when people claim that they'll be able to pay off 10K of debt in 6 months. If that's true, then you doctored shedules I or J to make you look much worse off than you actually are. I hope that most of you are like me, and you couldn't squeeze out an extra $100 a month without starving.

[rockyroad]

Joe...I'm pretty certain that a majority of people on this forum are just like you, however, there are some that find themselves in different situations involving buisness debts. Many (like myself) have no consumer debt but have found themselves involved in business deals that leave them personally liable for millions! (mainly real estate)

Look at people like Donald Trump who have filed BK before when deals have gone south. I doubt he was ever scraping by or nearly starving, nor was he left penniless to start another business.
Yes, there are LEGAL ways to protect assets and this is where an attorney will come in handy, which the OP certainly needs!

As far as screwing AMEX out of 5K, I don't see it! He is cashing in points he has earned by paying previous bills. If AMEX didn't want him cashing out the points, they would have frozen his account with membership rewards, which they will eventually do when and if he actually defaults on his account. AMEX doesn't send 1099 forms to indicate they gave you a cash bonus for using their cards. It's a perk that comes along with being in good standing card member.

IMO, and I could be wrong, but I see the OP seeing things sliding quickly and panicking so to speak. How can I start another business, how can I keep a 30k car???
We don't always have to jump to the conclusion that people are trying to defraud the system! They have never had financial problems before and are uneducated about the process, as was I when I first found this forum.
I've learned so much by reading a little every day and so will NOLAWYERYET! But No Lawyer does need to find himself a Lawyer and start pre-planning and strategizing for his BK!

[Trixie007]

As far as screwing AMEX out of 5K, I don't see it! He is cashing in points he has earned by paying previous bills. If AMEX didn't want him cashing out the points, they would have frozen his account with membership rewards, which they will eventually do when and if he actually defaults on his account. AMEX doesn't send 1099 forms to indicate they gave you a cash bonus for using their cards. It's a perk that comes along with being in good standing card member.

I'm not disagreeing with your post, but you need to re-read the OP! He did not cash in points to get the gift cards. He charged $5k in AMEX gift cards on his AMEX card...

[NoLawyerYet]

Thanks Rockyroad. I was just using the $30k car as an example. My worse fears are coming true and things are starting to get a little messy. I'm real worried about a lot of things, one being the ability to drive a car. my life, as a lot of you is about to change. My car payment now is $1217 per mo, (60 months) and i might have to file in 12 -18 months. Will they take the car? there wont be any eqiuty in it for probably 36 months. If they take it then what?

thanks again for your help

[Trixie007]

I'm guessing the trustee might have a problem with a car payment that high. From the sounds of it, and I could be wrong, you are currently ok - just seeing the writing on the wall down the road? If that's the case, you still have a ton of options!

In Sept 07 I started worrying about our credit scores going down in the future (never thought BK tho!) and I was in a leased 2007 Honda Pilot. I was upside down by about 4k, but our credit was still good, so I decided to get into a more affordable car. Through a lot of comparison shopping and back and forth running around between 3 different dealers I was able to get a Mitsubishi Lancer - they zero'd out my lease (did NOT tack it on the new loan), matched Toyota's promotional interest rate, and matched Honda's incentive pricing, and required no down payment. That left me with a car payment of $327 a month, plus I'll own the car at the end. In this economy, there's a lot of wheeling and dealing to be done to start paring down your lifestyle and setting yourself up for future success - this is just one little example, everything's up for negotiation.

Also, if all of your numbers are high - income, expenses, losses, etc - then that 157k will likely blend right in, if you spend carefully and start scrutinizing your every move before you make it. And it seems like you're already doing that!

btw... car dealers are usually pretty happy to see the back of me after I buy a car

[JRScott]

Okay first things first.

When you get the 157k, take and spend the amount to pay off the AMEX card for the gift cards thus eliminating that possible red flag.

Next I'm thinking you need to seriously adjust your tax withholding, there is no reason to allow the US government to use your money tax free.

Now these millions your gonna owe, I hope that's not taxes. Assuming it is just the deficiency balance on mortgages that go to foreclosure don't worry about it, that deficiency balance would be removed on a successful bankruptcy.

The key now is not to do anything that would mess up a successful bankruptcy. With RE business etc involved expect a more than casual look by the Trustee and US Trustee, if millions are involved they are going to be looking. Don't try to hide any assets. Keep receipts for anything you spend money on.

Okay on the car. You need to attempt to project your gross income for the coming 6 months and review it for the last 6 months. If your car payment is 15% or more of that then it is to expensive for your current income level. Time to let the car go. What I would do is if you can keep the payments going til the bankruptcy then surrender it as part of the bankruptcy. Take some of the 157k and buy an old beater car, something that you can exempt (not sure of FL's exemption on car but I wouldn't sink more than a couple k into this).

You might could do a maximum contribution to an IRA account to assuming you can exempt it in florida.

However for the most part you're going to lose that 157k when you file.

Pay off the AMEX to prevent them from crying fraud and challenging your bk.
Get an old beater (1-2k tops here)
If you've not been in a while go to the dentist for a checkup
Go to the eye doctor if you've not been in a while
Go to a medical doctor to get a general checkup
Keep receipts
Stock the house with a reasonable amount of non perishable food and goods (say 3 months worth assuming it has enough shelves).
Look over the house....make repairs as needed if you plan to keep it and can afford to.

Beyond this probably you are not going to be able to save this money.

Do not transfer any property or cash to any family member, friend or associate. Like I said if your case involves millions in real estate it will be reviewed with a fine tooth comb, they will discover if you do anything along this line. If you have already made the mistake of doing so, make sure to tell the lawyer up front because most lawyers worth their salt find out you lied to them about assets they will quit your case (and you don't get a refund). A trustee who finds examples of this can and will most likely file a motion to dismiss your case with prejudice. If that happens you do not get a discharge for the debt nor may you ever file on that debt again. Thus don't think I need to hide this for the future, because if you do you imperil your future.