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When filing Chapter 13 does it matter if I have money in a checking account?

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  • When filing Chapter 13 does it matter if I have money in a checking account?

    Question, I am married, filing single. My paychecks are deposited into my husbands account in which I am a signor. I do have my own checking account but unless I transfer money there is generally under a $50 balance. The day of filing does it matter if we have a few thousand dollars in my husband's account? There are still other bills we pay besides the ones that I have (all unsecured) that I will handle through a 100% chapter 13. For instance we may have $4,000 in his account but out of that comes utilities, his car payment, his personal debt payments, house payment, food, etc.

  • #2
    If you are paying 100% of unsecured debt, then you can have as many non-exempt assets as you want. Even if you weren't paying 100%, you could have non-exempt assets as long as your plan pays to unsecured creditors at least the value of those assets.

    The fact that the cash is in your husband's account is irrelevant. If it is your money, it should be listed as your asset and will be treated like all of your other asserts.
    LadyInTheRed is in the black!
    Filed Chap 13 April 2010. Discharged May 2015.
    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

    Comment


    • #3
      Thanks for the response. Another question. So if I wait like 4 or 5 months to file Chapter 13 I will have accumulated over $10,000. Can I use that money to pay on his unsecured debts so his credit is great shape when I file so if we need anything in the next 5 years like a car, etc. we have options. My car is already 8 years old so just anticipating for the future. Not trying to skirt the system at all just trying to figure out the facts prior to filing. I don't want to do anything at all wrong. My thought was instead of paying the $10,000 to my creditors I could use that money to pay for car insurance for a year in advance, pay off some of his credit cards, etc. (he is not filing and his credit is good)

      Comment


      • #4
        You need to discuss that with an attorney. Paying your husband's separate debts right before bankruptcy is probably a voidable transfer to your husband. It probably has the same effect as having that money sitting in a checking account (you'll need to pay it to unsecured creditors during the life of your plan). Keep in mind that your situation could change during your 5 year Chapter 13. What if you lose your job and have to modify your plan? If you have to much you must pay to unsecured creditors based on non-exempt assets or voidable transfers as of the date you file, you may not be able to propose a feasible plan. Of course, in that situation, you may also qualify to convert to Chap 7. If you are concerned about having a car that will get you through a Chap 13, it may make more sense to buy a car. Or, save that cash as a back up during your Chap 13. Do you know if you have a trustee who will insist that your plan pay all of your disposable income to the plan vs. debt divided by 60 months? If so, having that savings will really help.

        If I were you, I would prefer to get the Chap 13 filed, so you can be done as soon as possible. In fact, that is what I did. I wasn't in 100% plan, but I had a large wildcard exemption and not enough assets to use all of it. When I first met with my lawyer, I decided to stop paying my creditors and save money for awhile before filing. A month later, when I was only a couple of weeks late on my payments and after having financed a new car, I called my lawyer to tell him I wanted to file. I'm glad I did.
        LadyInTheRed is in the black!
        Filed Chap 13 April 2010. Discharged May 2015.
        $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

        Comment


        • #5
          Going forward my husband can finance a car for me if needed. Hopefully not. As far as the cash I save between now and filing, what should I do with it? Just keep cash at home or what? So confused. Also because I will be paying back a 100% Chapter 13 we as a married couple will still have a considerable amount of DMI left over - about $1,000 a month. So we will be able to save month, pay his debts, etc. during my Chapter 13. I was just concerned about the cash on hand when filing because there will be cash if I stop paying creditors.

          Comment


          • #6
            Having cash when filing is not an issue in a Chap 13. Chapter 13 trustees do not liquidate assets to give to creditors. Non exempt assets simply create a minimum amount that must be paid to unsecured creditors during your plan. If you have $10,000 in non-exempt cash (or any asset) on the day you file, then your unsecured creditors must receive at least $10,000 in your plan. Based on your other thread, they will receive a lot more than that.

            Leave the cash wherever you usually put it (unless it is with Wells Fargo, which actually may not be problem if your SSN is not on the account) and let your attorney know about it so it can be reported on your petition as an asset. Even if you keep it at home you would have to report it on your petition.
            LadyInTheRed is in the black!
            Filed Chap 13 April 2010. Discharged May 2015.
            $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

            Comment


            • #7
              Thank you. I get it. Just wanted to make sure that if I'm paying back 100% I could keep money saved before filing for needed expenses that may arise during the 5 year time period.

              Comment


              • #8
                Text deleted by moderator. Question asked in separate thread.
                Last edited by LadyInTheRed; 07-29-2016, 01:18 PM.

                Comment


                • #9
                  raygunn99, please do not post the same question in two places. Posting your question in a new topic was a better choice. The situation is similar, but also very different.
                  LadyInTheRed is in the black!
                  Filed Chap 13 April 2010. Discharged May 2015.
                  $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                  Comment


                  • #10
                    I moved this thread from "General Bankruptcy" to "Chapter 13" because the issues are different in a Chap 7.
                    LadyInTheRed is in the black!
                    Filed Chap 13 April 2010. Discharged May 2015.
                    $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

                    Comment

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