Putting Away Rainy Day Money

[confused72]

We are in the process of deciding whether we are eventually going to need to file for BK. We wouldn't do so for probably at least another 6-9 months. My question is, if we had some money in the bank, and were to slowly withdraw it over the next several months and put it under the proverbial mattress, what is the best advice everyone would have for doing so. Would you keep the withdrawls small but more frequent such as just a few hundred dollars at a time. Or is there are a particular "look-back" period where the court or trustee will require looking at bank statements for example within 3 months or your filing.

How would you best advise how to handle getting whatever money you have out of the bank long in advance of filing, without raising suspicion.

Thanks in advance for your thoughts and advise.

[killinstinct]

The answer is.......

it depends.

Above all, you need to be honest. What state are you in, what are your exemptions, are you keeping your house, do you have any other assets, etc.

It is not worth risking having your BK dismissed to try and stash a little extra $$. Generally, you are allowed to have a certain amount of $$ set aside.

Above all, take advantage of the fact that you have a huge ## of atty's competing for business and are willing to provide you with advice. Give them your numbers and you'll get good, free, advice.

Good luck!!

[confused72]

Expansion of my Question

killinstinct,

Thanks for your reply. Our house is about 100,000 upside down so we will most likely not keep the house. Both our cars on leases, and we really own no other assets. The biggest asset I have is I own my own company, which is sort of how I got into this situation, 250K in credit card debt on my credit cards and my wifes credit cards to fund the business over the past couple of years, particularly during the tougher economic times.

I recognize that I will most likely lose the business, and any inventory, etc. in the process of when we file, as I'm sure I will end up having to BK both our personal situation and the business at the same time.

But again, my primary question is I have about 25K in my business bank account (held entirely in my name, the business is a single member LLC.) and I know full well that when the time comes to file BK if we have to eventually go down that road, that any money left in the bank accounts under say $1000 or whatever you are allowed to keep exempt, that the rest will be seized by the trustee.

So with those details in mind, and with plenty of time to plan for this, and not having to actually file for probably another 6-9 months, maybe a year, can I safely withdraw that money over time and stash it away.

By the way I am meeting with a BK attorney this week, but I'm not entirely sure if I can come out and exactly ask that question directly, so that's why I was hoping to use the resources on this board in advance of my appointment.

Thanks again.

Confused72

[Flamingo]

No one in this forum will advise you to commit fraud. Consulting with an attorney is your best bet since your BK will be a bit more complex involving a business and also any discussion between you and the attorney as to your finances is privileged information. Make sure the attorney you consult with is a good business BK attorney. Best of luck to you.

[jribe]

$25,000 is a lot to withdraw over six months.

Remember that the Trustee will likely ask for bank statements if you had 25k in your account six months before filing and then it was down to $1000 at filing.

That's a serious red flag.

I had one guy that this happened to at my 341. The trustee wanted to know what happened to the 50k in his business account; and the guy said "i don't know"..

You could buy exempt assets with the money. That's the best i can offer you.

Fund your retirement accounts, purchase healthcare, put a down payment on cars you'll be keeping.. etc.

We are in the process of deciding whether we are eventually going to need to file for BK. We wouldn't do so for probably at least another 6-9 months. My question is, if we had some money in the bank, and were to slowly withdraw it over the next several months and put it under the proverbial mattress, what is the best advice everyone would have for doing so. Would you keep the withdrawls small but more frequent such as just a few hundred dollars at a time. Or is there are a particular "look-back" period where the court or trustee will require looking at bank statements for example within 3 months or your filing.

How would you best advise how to handle getting whatever money you have out of the bank long in advance of filing, without raising suspicion.

Thanks in advance for your thoughts and advise.

[killinstinct]

killinstinct,

Thanks for your reply. Our house is about 100,000 upside down so we will most likely not keep the house. Both our cars on leases, and we really own no other assets. The biggest asset I have is I own my own company, which is sort of how I got into this situation, 250K in credit card debt on my credit cards and my wifes credit cards to fund the business over the past couple of years, particularly during the tougher economic times.

I recognize that I will most likely lose the business, and any inventory, etc. in the process of when we file, as I'm sure I will end up having to BK both our personal situation and the business at the same time.

But again, my primary question is I have about 25K in my business bank account (held entirely in my name, the business is a single member LLC.) and I know full well that when the time comes to file BK if we have to eventually go down that road, that any money left in the bank accounts under say $1000 or whatever you are allowed to keep exempt, that the rest will be seized by the trustee.

So with those details in mind, and with plenty of time to plan for this, and not having to actually file for probably another 6-9 months, maybe a year, can I safely withdraw that money over time and stash it away.

By the way I am meeting with a BK attorney this week, but I'm not entirely sure if I can come out and exactly ask that question directly, so that's why I was hoping to use the resources on this board in advance of my appointment.

Thanks again.

Confused72

I'm in no way qualified to answer this question, I can only relate my own personal experience. Exemptions, etc. depend on what state you are in. I was in Washington State and we surrendered our home as well (also about 100K negative equity). No significant assets other than retirement, car, furniture (all untouchable anyway). Our attorney mentioned that with our house surrender we had "plenty" of room for $$$ exemptions in our bank account.

Every situation is different, however.

Please be honest and consult several different attorneys, continue to do your own research. You'll find the right way to deal with the situation and protect the assets you need to start again.