large withdrawals

[fas917]

Hi,

I am in the process of retaining an attorney, but I have a question. My wife is been withdrawing $2500 cash from our joint checking account every month to pay rent, bills, food etc. We stopped using CC since we will file. Will this large withdrawals raise any flag when I file for ch7? She has been doing this for more than 6 months now. Thanks.

[Cali]

If she is paying bills and can show that, it shouldn't be a problem. I withdraw more than that for just rent.

[AngelinaCatHub]

It probably will, but I hope you can tell me she saved reciepts? Please tell me that. Now if your checking account has no activity from food stores or utilities, I guess you could explain food and lights were paid from some fund so that could be just fine. Reciepts are best right now, and I would not change the habit since you have established it as your normal routine. 'Hub

[fas917]

Great, I dont think she kept any receipts. We did not think that we would come this far. Well, she used that money to pay rent, food, transportation, personal spending, etc.. again no receipt to show except for rent which is $1500.

Also I rent from my dad, will this be a problem?

[AngelinaCatHub]

Gee, you were starting to sound better with the accountability of $1500, until you said Dad. Have your wife make up a list of those items rent, food, utils, etc. that she regularly pays. About Dad, is it fair market price where you live or are you getting a big break from Dad. For what you have been renting what is the average in your area for the same thing. See your attorney. 'Hub

[Help!]

Yes, if you have no receipts for rent paid to a relative it will be a problem. Sorry to be the bearer of bad news. It is not the end of the world, but when you do retain an attorney they will likely advise you to go rent an apartment and delay your filing.

[fas917]

I am getting a little break since the rent includes gas and cable/dish in NYC. Should I tell her to stop withdrawing or should she continue to do the same?

Thanks 'Hub

[lrprn]

...when you do retain an attorney they will likely advise you to go rent an apartment and delay your filing.

Whoa!! Slow down...this is not necessarily the case.

If there's no official renter's agreement with your dad, what I would encourage you to do is get one in place, sign it, and get it notarized. Here's a link to what a NY rental contract should include - http://www.nupplegal.com/rental-application.html (don't buy the contract, just look at the bullets about what needs to be inserted).

Help was right about seeing a lawyer to help you sort this out. Set up appointments with 3-4 in your area - most give free initial consultations. Go with your financial information laid out - you'll find out what's likely to happen in your unique circumstances if you do file, plus you'll learn a ton about any potential issues you face filing. There's no obligation - just a chance to find a lawyer who's knowledgeable and you feel you can work with well. The more YOU know about bankruptcy yourself, the better!

Hang in there! Keep asking questions - we'll help you sort things out as best we can.

[Cali]

This is why I used money orders to pay bills.

[fas917]

Yes, if you have no receipts for rent paid to a relative it will be a problem. Sorry to be the bearer of bad news. It is not the end of the world, but when you do retain an attorney they will likely advise you to go rent an apartment and delay your filing.

I have rent receipts. I do not have a signed lease or agreements.
My question is will I face problems because I used cash for all transactions.

Thank you lrprn. I will get an agreement in place with my dad. To clarify, my dad own an apartment building and I am renting the ground floor. The utility and phone lines are all under my name.

[AngelinaCatHub]

Asking again, is your rent near average for the same rent around the neighborhood? Since Dad has a whole building he is renting to others, what do the others pay? Even with a substantial break, I could understand a Trustee realizing you were not out to "pull anything off" on him, but got a good deal. Now the difference is going to be difficult but if your wife will START keeping reciepts for the next couple months and DO NOT CHANGE your routine, that would flag me faster than no reciepts. As I said before, the food and other expenses were paid someway, it is logical with two months of similar spending and reciept that it would be assumed the other months were within the same scope. Make sence? 'Hub