Direct deposit or not?

[annikasaunt]

My partner and I are both filing BK. It gets a little complicated because we have joint bank accounts and some joing CC's.
We have a loan at our bank that will be included in both of our filings,( of course we are filing seperately). We have opened another joint account at a different bank because of this. Both checking and savings. We currently both do direct deposit of our paychecks every week. Should we stop the direct deposits and do our "own" banking from now on? Or until this entire nightmare is over! We have an appointment with our atty this weekend and I have a million questions to go over with him. We are both fully paid in full with him so we can proceed once he has all our paperwork in order.
I can't say enough about this site...it has given me a world of information from people who have been there and are there and are going there!!

[StaciMM]

It shouldn't be a problem to keep direct deposit. If you have a good relationship w/ the bank, they will never have reason to know of the BK anyhow.

[annikasaunt]

I was more concerned about the court tracing my deposits to the bank and then having to explain where the money is. If I were to cash my checks and only deposit enough to cover my bills for the month would they question where the rest went? I plan on finally getting some dental work done, I have some doctors that I have put off going to because I couldn't afford it. So now that some of my money will be freed up by not paying these creditors every month I was going to start using it for these doctors, etc..
Is this what is meant by allowable exemptions?
I also need some repairs done around my house that simply can't wait much longer...roof needs repair, I have a back door that is stuck closed because of a bent frame, front steps are falling apart...can I start fixing these things up also?
I don't want to get in trouble for not banking all the money. I know the court can take it, but I don't want them to have it!! I'd rather spend it on things that are exempt or whatever you call it! HELP!!

[SinkingFast]

We stopped the Direct Deposit of pay checks to the Bank. Now, I take them to deposit. Instead of depositing the whole check, I do keep a tad out. Basically Hubby's gasoline and pocket money. Nothing that wouldn't be explained if bank statements were compared before DD and after.

We have also started using Money Orders to pay all bills and I get a Cashier's Check at the Bank to pay our rent. Our Landlord was taking weeks sometimes to cash our rent checks. That way the money is gone immediately. I completely fill out the Money Order stub and attach it to the bill statement. I also keep my receipts from purchasing the Money Orders as well.

This way, on the day we file, we have as little cash as possible physically present in the bank that we have to cover with an exemption. And if for some reason, the Trustee freezes the acct temporarily, there's no checks floating around out there that might bounce. Typically Trustees don't freeze accts, but they can, and do sometimes. We just wanna be prepared in advance.

That's how we're doing business until after we file. Once we get the BK settled, we'll go back to doing things normally. But for now, we want to have complete control over our cash flow. In and out.

We're also planning for the right day of the month to file. Our State has an exemption that allows us to cover all but 10% of earned but unpaid wages. There's no set dollar limit on that exemption. It just says all but 10% of earned but unpaid wages. We want to file on a day when that 10% is the least possible amount it can be as well. Because that's money we'll have to pay the Court out of pocket.

[SinkingFast]

I was more concerned about the court tracing my deposits to the bank and then having to explain where the money is. If I were to cash my checks and only deposit enough to cover my bills for the month would they question where the rest went? I plan on finally getting some dental work done, I have some doctors that I have put off going to because I couldn't afford it. So now that some of my money will be freed up by not paying these creditors every month I was going to start using it for these doctors, etc..
Is this what is meant by allowable exemptions?
I also need some repairs done around my house that simply can't wait much longer...roof needs repair, I have a back door that is stuck closed because of a bent frame, front steps are falling apart...can I start fixing these things up also?
I don't want to get in trouble for not banking all the money. I know the court can take it, but I don't want them to have it!! I'd rather spend it on things that are exempt or whatever you call it! HELP!!

I wouldn't think you'd get in trouble for not depositing money in your bank as long as you can show where it went. Necessities are one thing. The Court will understand that. Like one attny told us, "Just don't go and take a vacation to Vegas with the money."

Like the repairs needed on your house. Get estimates to fix the steps, pick a contractor, and buy a Money Order to pay the bill. Money gone. Keep the Money Order stub. Attach it and the MO purchase receipt to the repair bill. Same thing with the door and the roof. Or, if you or a friend do the labor, pay for the supplies with a Debit Card. Money immediately gone again.

Just be sure to maintain your paper trail. Be able and prepared to show where the money went and what it was spent on.

[StaciMM]

Spending money on necessities are fine.

Before you go repairing the house, though, where do you stand on home equity & exemption for it?

[SinkingFast]

Spending money on necessities are fine.

Before you go repairing the house, though, where do you stand on home equity & exemption for it?

Good point, Staci!!

You don't wanna sink a lot of money in the house if you're close to, or over your exemption limit in equity already.

[annikasaunt]

Its a mobile home...no equity! I owe $22,000 on it, it may be worth about $35,000. But you can never get an equity loan on a mobile home because they depreciate just like a car! I don't own the land either.

[SinkingFast]

Better check your State's Exemptions Statutes.

We have to file BK under Missouri Statutes because we haven't been in the new state long enough. Hubby's been here a tad over a year, but New Law requires 2 years residency before you can use the new State's exemptions.

Missouri has 2 Homestead exemptions. One for a "traditional" house. Another for a Mobile Home. While joint filers can get $7500 each, or a total of $15,000 for a "traditional" home, Mobile homes are limited to $5,000 each, or $10,000 total for joint filers.

Based on the values you quoted, not all your equity would be exempt under Missouri statutes.

[StaciMM]

Whether or not you can get a home equity loan is not the issue. If you owe less than it is worth, you have equity. Each state allows you to have so much in equity, and anything beyond that is subject to the trustee. I would assume a mobile home qualifies for the homestead exemption-this is something to discuss w/ your attorney of course.

Is the home in both names, or just yours? From what I can find online, IL allows $7500 as an exemption. If you own it jointly, it is fair to say that each of you 'owns' 1/2 of the equity, or about $6500 each which is less than the exemption. If only one of you owns the home, different story... Of your $13,000 in equity, only $7500 is exempt and so the trustee MIGHT come after it. If there are repairs needed, he'll be less likely to as that will cut into his profit. If you make the repairs, you could be adding to the value and therefore equity.

Its a mobile home...no equity! I owe $22,000 on it, it may be worth about $35,000. But you can never get an equity loan on a mobile home because they depreciate just like a car! I don't own the land either.

[annikasaunt]

It is only in my name and we are in Connecticut. I will check into the exemption here. My atty told me at the initial consultation that it wouldn't be a problem, but I will double check.

[StaciMM]

Sorry! I think I mixed you up w/ someone else who said they were in IL!

CT won't be an issue. "Real property including mobile home or manufactured home to $75,000."

[annikasaunt]

Cool, yes I've been discovering that the Connecticut exeptions are pretty generous. They must think we are all rich here! The means test wasn't even an issue for me because our per capita income for that is like $55,000 or higher! Atty says it is based on the income from alot of the richer counties in the state...good for them! I will be so glad when this is over and I'm glad you guys are here to hold my hand!!

[SinkingFast]

Cool, yes I've been discovering that the Connecticut exeptions are pretty generous. They must think we are all rich here! The means test wasn't even an issue for me because our per capita income for that is like $55,000 or higher! Atty says it is based on the income from alot of the richer counties in the state...good for them! I will be so glad when this is over and I'm glad you guys are here to hold my hand!!

Geez!!

The week, and I mean the very WEEK, Hubby was laid off, a buddy of his, an old collegue he used to work with, offered Hubby a job in Long Island. They were even willing to boot the salary to PhD level for Hubby in lieu of his years of experience.

Many people work in New York but live in Connecticut. It's not uncommon as it's much cheaper to live in Connecticut than in New York. You just commute 90 minutes each way to work.

Costs of living on the east coast being what they are Hubby politely declined the offer.

We shoulda gone! Look at the exemptions we'd of had!

[annikasaunt]

LOL...I've been here my entire life. So, I guess I'm used to all the taxes, and nonsense that goes with the East Coast! It has gotten a little crazy, probably helped get me into the situation I'm in now!