Paying bills before you file

[confusedinok]

I was reading another thread where there was issues with paying rent right before the person filed. That brought some questions to my mind. How should we pay the bills for mortgage and utilities right before we file? When should we file in the month? Would it be better to file right after we've paid the mortgage? Wait till it's been processed? etc. I don't want to have trouble meeting those bills during the BK process. If the money is in the bank but earmarked for mortgage or utilities, how does that work?

Thanks!

[debee]

If you pay by check, wait for the checks to clear.

If you pay online, file after the payments clear your account.

If you pay via money order or cashier's check, file after they have been rec'd by the mortgage/utility company.

If you pay anything by cash, file after you've done it (save receipt).

[confusedinok]

Is only the amount at the time of filing going to be important? There's quite a bit of time between filing and the creditor's meeting. I like to split my bills between pay periods, which means half of the amount is still in the account at almost any given time. This is all very confusing! If my account is very low, then we file, then we have a pay period where half of the mortgage and utilities is deposited in the account (not to mention the money that's in there for car ins., life ins., etc.) will that be an issue at the 341?

[ValleYum]

The amount in your bank account that the Trustee (and almost everyone posting here!) is concerned with is the balance reported by the bank (not your check register!) on the DAY you file bankruptcy.

Many people refer to this as a "snapshot" of your finances on filing day. To make sure you don't have excess funds on deposit the day you file may require a bit of planning ahead - we pay our bills from 2 monthly checks so I understand why you are concerned and confused.

Remember that this means that any personal checks that you have written but that haven't cleared the bank, will be a part of the balance that your bank statement shows on the day you file.

While the Trustee can (and some do) ask to see your bank statements for a period after you have filed, any funds deposited after your filing date are not part of the bankruptcy estate. We had accumulated a little savings between filing and our 341 and this was not an issue here - but check with your attorney to make sure!!

I glanced at Oklahoma's bankruptcy exemptions and do not see an exemption for cash. There is one that allows you to exempt 75% of of wages earned within 90 days prior to filing bankruptcy so make sure to ask your attorney about that and what it means for your bank account on filing day! If you don't understand his answer, ask him again. Bankruptcy "rules" are as clear as mud sometimes.

Good luck!!

[debee]

Is only the amount at the time of filing going to be important? There's quite a bit of time between filing and the creditor's meeting. I like to split my bills between pay periods, which means half of the amount is still in the account at almost any given time. This is all very confusing! If my account is very low, then we file, then we have a pay period where half of the mortgage and utilities is deposited in the account (not to mention the money that's in there for car ins., life ins., etc.) will that be an issue at the 341?

The income you earn after filing is not property of the bankruptcy estate. So, you don't have to worry about the trustee when it comes to that money.

edit: There was no post on this thread when I started typing. I am too slow ova hee. My little people needed me and when I came back and posted, I see VYum had already come and gone!

[confusedinok]

So would it best to wait and file just before a pay day? Then all the grocery and gas cash that was pulled would be gone and there would be not much in the account.

[ValleYum]

So would it best to wait and file just before a pay day? Then all the grocery and gas cash that was pulled would be gone and there would be not much in the account.

That is what we did. It just seemed like there was less worry by doing it then. But do ask your attorney about the amount of money in your account just to be triple sure!!

[IHateToBeEmo]

So would it best to wait and file just before a pay day? Then all the grocery and gas cash that was pulled would be gone and there would be not much in the account.

Waiting until just before a payday is a very good idea. Just make sure your attorney doesn't delay filing by a day or two, and you end up with a lot of money in your account on filing day.