Wise financial moves to make pre fling?

[bornfree2]

What are some financial moves one should/could do prior to filing BK7 that is harder after?
Here are some ideas Im thinking prior to pulling the trigger.

Good or bad move?

- open up one or two bank accounts as backups?
- apply for a secured card offer i recently received?
- pull out excess money from accounts (leaving for essential expenses)
- requesting credit reports, checking reports, etc
- getting a po box for all court communications
- getting a 'proxy' phone number (google voice) so real one isnt on public filings

Ive read about the idea of 'spending down' money but i dont have any lol. But perhaps I could start an IRA or maybe that is too late.

Any moves you guys can think of to do before filing? If you had to do it again?

[justbroke]

The rule of thumb is not to do ANYTHING financial prior to filing bankruptcy, at all. There are few exceptions.

- open up one or two bank accounts as backups?

Absolutely fine so long as you provide the bank statements as requested by the Trustee. This is actually a good strategy if the would-be-debtor has demand deposit accounts (DDAs) at the same place that they have credit products. (This is one of the only financial exceptions.)

- apply for a secured card offer i recently received?

No. It is a 99.99% change that any credit card that you have prior to filing will be automatically and summarily closed. This is even if you don't list the card in the creditor section or the mailing matrix, since most creditors subscribe to bankruptcy notifications. There are miracles at times where a card survives the filing of a bankruptcy. I had a Jared's card survive, but as soon as I went to do something with the account, it was summarily closed.

- pull out excess money from accounts (leaving for essential expenses)

Absolutely not. This is one of those things that will get your case scrutinized even further. The Trustee will want to know if you're hiding money or if you spent it in a way that can be clawed back. If you are hiding money and did it to hinder, delay, or defraud the bankruptcy estate, the Trustee/UST will call the U.S. Attorney for a referral.

- requesting credit reports, checking reports, etc

This is actually normal so that one can completely fill out the schedule of creditors on the petition. Many attorneys use bankruptcy software packages that pull the creditors straight from a credit report (and/or a tri-merge report) right into the petition.

- getting a po box for all court communications

I don't know why anyone would do this. It's a waste of money. Unless you're in a rural area which demands/suggests using a PO box, there's no need to not provide your true home address. A typical Chapter 7 lasts for 120 days (filing to close).

- getting a 'proxy' phone number (google voice) so real one isnt on public filings

People do this for creditors, but not usually the bankruptcy court unless they are trying to hide. The only case I know of is a Bankruptcy Petition Preparer who was, in fact, trying to avoid the court. Although this wasn't a debtor, it clearly showed that she didn't want anyone to reach her and this lead to her being jailed on a felony. The court noted it was due to her "brazen disregard for the laws and rules of the bankruptcy system."

Ive read about the idea of 'spending down' money but i dont have any lol. But perhaps I could start an IRA or maybe that is too late.

It depends on the spend down and the type of IRA. This type of questions requires an attorney if you're going to do this type of planning.

Any moves you guys can think of to do before filing? If you had to do it again?

Nothing differently. I never want to give the appearance of hiding or not wanting the court's help. I filed bankruptcy so that the court would protect me from my creditors.

I understand wanting to be anonymous, but that's no place for the bankruptcy or any court. Should you choose to use the power of the bankruptcy court and seek its protections, its good to also be forthcoming and open. The items that you listed, to try to stay anonymous, actually do nothing to protect your identity or to make you anonymous. It's your name that is public and is upon which people will search. LexisNexis, and the credit bureaus, will automatically tie your Google number, and PO box, to all addresses you ever had. That will be available to any creditor.

[bornfree2]

Absolutely not. This is one of those things that will get your case scrutinized even further. The Trustee will want to know if you're hiding money or if you spent it in a way that can be clawed back. If you are hiding money and did it to hinder, delay, or defraud the bankruptcy estate, the Trustee/UST will call the U.S. Attorney for a referral.

1- Well i take out money to pay my rent (partial due to covid relief) and i dont understand why it would 'suspicious' if i take out a bit more to cover the further months rent while the case is going on. The last thing i need is the bank to be frozen with all i have and i cant do anything.

Im not talking large amounts (sub $1000). But i can understand why it would be cause for investigation. If that is the case, dont i just send them my rent receipts to show that i spent x amount of that withdraw in cash to the landlord?

I guess the smart move here is to withdraw the cash and deposit it into another new bank account then show that in the filings.

2- Another thing is i NEED to get some dental work done. Im supposed to just ignore it for fear id be further investigated. it seems rather unjust that one has to play 'freeze' while the BK case is open. I mean people have live, problems arise, etc.

3- I agree its pretty hard to hide from the online bots with addresses and phone numbers. sigh

4- Thank you for your thoughts!

[justbroke]

1- Well i take out money to pay my rent (partial due to covid relief) and i dont understand why it would 'suspicious' if i take out a bit more to cover the further months rent while the case is going on. The last thing i need is the bank to be frozen with all i have and i cant do anything.

Unless you're in Wells Fargo, banks don't freeze your accounts. I'm not even sure WF does that any longer as they got a lot of flack, even from the Trustees.

Im not talking large amounts (sub $1000). But i can understand why it would be cause for investigation. If that is the case, dont i just send them my rent receipts to show that i spent x amount of that withdraw in cash to the landlord?

The problem is that even if you have $1,000 in cash, under your mattress, and you have earmarked it as rent, that doesn't matter. Whatever you have in the bank, cash on hand, stuffed in a mattress, held in your safe, or hidden in a pillow... must be disclosed. The amount does not matter.

I guess the smart move here is to withdraw the cash and deposit it into another new bank account then show that in the filings.

Unless you have a reason to move money around, there's no need. The only time that I suggest this is when a person has depository products (DDAs) at the same place they have credit products.

2- Another thing is i NEED to get some dental work done. Im supposed to just ignore it for fear id be further investigated. it seems rather unjust that one has to play 'freeze' while the BK case is open. I mean people have live, problems arise, etc.

You could do this before the bankruptcy otherwise any cash that you set aside should be disclosed. No one is going to tell you to take cash out because you're trying to protect the cash. Cash on hand is still treated the same and requires disclosure.

3- I agree its pretty hard to hide from the online bots with addresses and phone numbers. sigh

It's not just bots, it's credit monitoring. The credit bureaus, and more strongly Lexis Nexis, even watch address change notifications. You don't even need to file a change of address with the post office. As soon as there is a piece of mail that is undeliverables, they know the address is bad. As soon as it is forwarded (via address correction and forwarding service) they now know where you live. They know your relatives, and can link together a chain.

Hiding from an ordinary person is easy with PO boxes and a Google number. You can't hide from LexisNexis unless you move to the woods and have no electricity, phone service, car, credit card, bank account, or relatives.

You are really overthinking this. If you are in California and using the exemption scheme (System 1 or System 2) which optimized your wildcard, this is just speculative and not a good exercise.

While I keep saying disclose, disclose, disclose and don't hide, hide, hide, that doesn't mean that it isn't protected under the California exemption scheme (System 1 or System 2). You disclose on Schedule B (Personal property) and then exempt on Schedule C (using an exemption). That simple. I don't see any issues because you say that you have no real or significant personal property. That means you have tens of thousands potentially available in wildcard exemptions under California's exemption scheme(s).

There's no need to hide physically, and no need to try to move money around. A bankruptcy is about disclosure. The reason people "spend down" cash is because they do not have enough in exemptions to exempt the cash. If you have enough exemptions, then it's unnecessary to spend down cash.

[bornfree2]

While I keep saying disclose, disclose, disclose and don't hide, hide, hide, that doesn't mean that it isn't protected under the California exemption scheme (System 1 or System 2). You disclose on Schedule B (Personal property) and then exempt on Schedule C (using an exemption). That simple. I don't see any issues because you say that you have no real or significant personal property. That means you have tens of thousands potentially available in wildcard exemptions under California's exemption scheme(s).

There's no need to hide physically, and no need to try to move money around. A bankruptcy is about disclosure.

One day I feel this is easy peasy and i should pull the trigger on that electronic self representation form that im putting together, then the next i wake up in a panic that i didnt disclose the 25 pounds of black beans i bought during the covid food crisis last year lol. I know i have 30k in exemptions.... i just dont know how eager the trustee will be to try to ferret out every single transaction ive done buying something on amazon, ebay, online, etc, etc. They probably have some tool we dont know about that tabulates every single thing someone has done without cash..

im not hiding anything, but i dont have the best memory of what ive done in the past 4 years as one part of the form asks.

"Im always thinking one step ahead, like a carpenter making stairs"

[justbroke]

Let me put it this way. Over 95% of cases end without a single hiccup. Those are the no asset cases. Do you wonder why no asset cases are quickly done? Because no Trustee wants to spend more than an hour on any Chapter 7 case because they only get about $60-70 per case.

That's right. The Trustee only makes $60-70 per case unless they find assets. A smart Trustee knows how to find assets and when to just let it go. There are many tools to do this (including LexisNexis) and other simple things. They are not all powerful. They are not trying to see where every penny went. They are looking at your 60 days of bank statements to see if money moved around. They (likely) do a simple asset search (LexisNexis), and so long as you're truthful, they'll ask to be excused from your case a minute to 1 day after your 341 Meeting. Most people that are caught are actually given up by friends, relatives, ex-spouses, ex-partners, and business partners.

It's this simple. Trustee looks to see that you earned no income in 2 years. Trustee looks at your bank statements... there's no money. Trustee is done in less than 1 hour except for the 341 Meeting. In fact, the Chapter 7 (panel) Trustee will likely only look at your case a day or two before the day of the 341 Meeting. People with more income and more money will get more scrutiny. Those under-the-median income, and especially those with no income for years, will receive the least amount of scrutiny.

No trustee wants to waste their time finding out you had beans. I mean, beans are worthless to the Trustee.

I think you are overthinking this.