Empty checking account on filing day, or 341 day?

[nickifan]

I realize I'm confused about something and don't remember now which thread I saw it in among all these subject categories.

I believe I've read that you want your checking account (and savings, I assume) to have zero or very little in it on the day you FILE ch. 7. Even if you are taking the money out to put it back in...something I have to do both for my own account at the credit union (just to be safe; no CC's affiliated with the CU) and for my name being on my mother's Wells Fargo checking/savings account (as I have a small Wells Fargo loan that I will list for Ch 7.)

Then I read SOMEWHERE that someone had a cranky trustee at the 341 and he wanted a check by the end of the day for some reason.... Maybe I have this all mixed up (quite possible, considering my frame of mind) but which day really matters for showing as little cash assets as possible? Filing day, or 341day, or both??

I have no income and the $5K I started the credit union account with is a loan from good old friends (and I'm told I will have to list them for chargeoff, even though I plan to repay.) I want to be sure that whatever I have in that account just before filing day is NOT there ON filing day...right??

Thanks so much. (I'm in Texas if it matters.)

[andy158]

It doesn't matter what is in your checking/savings account when you file or at your 341 as long as it isn't a huge figure. If you are filing for bk then chances are ther isn't much there to begin with. (I had $1,200 in mine the day of filing). There is a 6 month look back on your income and bank statements before you file and the schedules you and your lawyer fill out to determine that you qualify for a bk. Any large sums of money you deposit/withdrawal will be shown and it may throw a flag as to what was done with it and where it came from. Your first plan payment is due 30 days after your petition is filed. The trustee may require payment at the 341 if it falls in the 30 day period. You will have lawyer fees and filing fees to pay also, so you have to have the money somewhere.

[StartingOver08]

If you are simply removing funds from the account and holding them in your hand (or sock drawer) and then replacing them after you file; then, you are not understanding the basis for the amount of cash on the FILING date. The amount of cash you state on your petition is to accurately state how much you have in each bank account AND CASH ON HAND. The amount of cash is limited to what you can properly and legally exempt in your BK. Each state has an amount that is allowed for cash exemptions or other exemptions that include cash. Some states are generous, some are not. The reason some trustees ask for your bank statement including your filing date is to check your balances in each account so they can get the 'overage' if not exempted on the petition.

You are allowed to pay your attorney before you file and in fact, for a Ch 7 the attorney usually has to be paid in full. Paying your attorney and other expenses to spend down your account is perfectly legitimate. You want your account to reflect what is actually in there because 'pending' payments are not allowed. In other words, if you have a debit that hasn't cleared yet, the trustee can take those funds. That is why we say to make sure the payments leading up to the filing date are usually paid in money order or cashiers check. Then your balance will be accurate.

[JoeBankrupt33]

This just depends on what exemptions you are using. In Texas, if you have a lot of home equity then you would probably want to use TX exemptions. If you don't have equity, or don't own a home, then you would want to use Federal exemptions, which have a significant wild card amount if you don't exempt home equity. This wild card can be used for cash or amounts in your checking account.

If you cannot exempt the cash, then you want to have the account empty before you FILE. The amount in your account at the 341 doesn't matter.

[nickifan]

This just depends on what exemptions you are using. In Texas, if you have a lot of home equity then you would probably want to use TX exemptions. If you don't have equity, or don't own a home, then you would want to use Federal exemptions, which have a significant wild card amount if you don't exempt home equity. This wild card can be used for cash or amounts in your checking account.

If you cannot exempt the cash, then you want to have the account empty before you FILE. The amount in your account at the 341 doesn't matter.

Thanks all. Joe you've hit on it...two of the attys I saw said the fed exemptions would be best for me. I don't own a home, but I do want to protect my car (2002 Toyota, value varies, so it will be "close" in terms of using up most of the exemptions -- vehicle + wildcard + "leftover" of unused homestead exemption.

Problem for me is I can't file as a Texan until I've been in the state two years and that date is not until end of March! Otherwise I would be governed by the prop exemptions of NY, my former state, and they are not debtor-friendly at all. I'd lose the car to the Ch 7 trustee. (NY does not allow use of fed exemptions, only state.)

I should probably start a separate thread but while we're all here <g>...as an apartment renter who has a 12-month lease...is the lease considered a "debt" that I will have to list on the matrix? My main question is, will the property management company be notified that I have filed BK???? Lease in effect until Oct 2010...(just renewed Nov. 1st.)

THANKS AS ALWAYS!

[JoeBankrupt33]

You have to list the lease on schedule G, but if you are current on your rent and plan on staying, then they aren't listed as a creditor and they are not notified.

As for being Texan, wait if you can. When I filed this time, I wish I were still Texan.