How to spend small settlement $1650 before BK

[LostNFound]

I'm not sure if this is the correct place to post this, but I have a question about a settlement that I will be receiving shortly.

We had a collection company contact family members and violate the fair debt collections act. I really didn't know if I wanted to pursue any legal actions, but I had an attorney send them a letter to get them to stop what they were doing.

Anyway, they want to settle with me. I don't want to fight this in court and try to make more money from them. At this point, I just want to put it behind me. I wouldn't even take the money, but the lawyer says you don't leave money sitting on the table. So, he will take his share and i get what is left.

But if we are going to file bankruptcy in the near future, will the settlement affect us in a negative way? After all, it's income. I was thinking that I could spend it on something exempt, LIKE FOOD!!! That would be great! But do I donate the rest to our church? I'd really like a new Canon Lens for my camera, but I suppose that's not a necessity?

Any ideas?

[nc73]

Well if you haven't filed yet, pay your debts. Buy necessities first though.

[andy158]

*Keeping a small amount like that in your savings shouldn't throw a flag. After all you will need the money to secure an attorney and pay the filing fees.

*If you are going chapter 13 it won't be enough. Cost for a bk 13 is around $3000.

*The money shouldn't count as income because it is a one time thing and can't be counted on in further income calculations.

*If you wait six months after you get the settlement to file it won't matter either way.

[StartingOver08]

You can use the money for exempt items or to pay your attorney fees or to pay any priority IRS debt you may owe.

If you use it to pay other types of debt (unsecured debt) it won't help you at all in the long run. Buying a lens for your camara is not a good use for the funds.

Yes, this money will be included in your six month look back as income if you file within the next six months.

[LostNFound]

I plan to file in the next month or so. I have to get time to sit down and figure out what our actual income/expenses are currently.

Bummer about the lens...I was hoping someone on here could justify a reason to buy it....I "need" it to take pictures.

I don't really have any debt to worry about other then credit cards and I can't pay on those...that money wouldn't come close to a minimum payment for me. We have other expenses like house and car and we are paying those.

Honestly, I hadn't thought about attorney fees. We have a small amount set aside for that, but it's been a slow build of cash in our safe. This could just go to that and hopefully not look bad.

I need to remember that Bankruptcy is a voluntary decision and I'm not a criminal here. I keep thinking the worst case situation and I just dont' want trouble...

thanks

[AMISLANDER]

I'm not sure if this is the correct place to post this, but I have a question about a settlement that I will be receiving shortly.

We had a collection company contact family members and violate the fair debt collections act. I really didn't know if I wanted to pursue any legal actions, but I had an attorney send them a letter to get them to stop what they were doing.

Anyway, they want to settle with me. I don't want to fight this in court and try to make more money from them. At this point, I just want to put it behind me. I wouldn't even take the money, but the lawyer says you don't leave money sitting on the table. So, he will take his share and i get what is left.

But if we are going to file bankruptcy in the near future, will the settlement affect us in a negative way? After all, it's income. I was thinking that I could spend it on something exempt, LIKE FOOD!!! That would be great! But do I donate the rest to our church? I'd really like a new Canon Lens for my camera, but I suppose that's not a necessity?

Any ideas?

Spend it on important needs like: car insurance (pay it up for a year), mortgage or rent, anything that would be considered a necessity. You may have to prove where it went...

[lookingforward]

We spent everything in our bank accounts before the 341. We paid utility bills, insurance, phone bills, etc. And the trustee DID ask for the receipts.
He said no problem, you paid bills. I would definitely not leave it in your bank account though, I read a post on here the other day where someone did, they had a direct deposit paycheck for I think 1800.00 and the trustee took it.