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Payments just before filing ...

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  • Payments just before filing ...

    My story ... read and learn.

    On the 22nd of the month I made a $1,500 cashier's check to pay the rent. I mailed the check that day to my landlord who deposited it on the 1st of next month. On the 23rd (next day after I mailed the check) I filed Chapter 7.

    Now the trustee wants the money back stating that , even if the money were in the mail (I say so, no way to prove) , they are part of my estate.

    So, if I don't want my Landlord to return the money (and to jeopardize my relationship with him), I have to cough 15 hundred to the trustee.

    That's it. Pay attention.
    Ch.7 filed: 2/23/2011 Discharged: 7/7/2011 Asset: Yes Case Closed: 7/30/2013

  • #2
    That's painful.

    In my district it's the same. A cashier's check is debtor's property and transfers when it's delivered, not when it's issued.

    May not be much consolation, but you probably just spared someone else from making the same mistake.

    Hang in there.
    There are two secrets for success in life:
    1.) Never tell everything you know.

    Comment


    • #3
      So what would be the best thing to do here? If you had withdrawn $1,500 and got a money order to give to the landlord, would that have been ok?
      341 Date ~ July 6th, 2011 ~ Wish me luck

      Comment


      • #4
        I'm confused... if Stan had written a check to pay for his rent would this have been an issue?

        Comment


        • #5
          I tell my clients to pay bills with cash, cashiers checks and/or money orders beginning about 30 days prior to filing for this very reason. I make it a point to make them tell me when their account balance is drained. If the $$ is still in the bank on the day you file it is an asset of the bk estate. Hard lesson to learn but the money needs to be gone before filing - and gone does not mean sitting on your dresser in the form of a cashier’s check made payable to the landlord. Gone means gone - totally and 100% out of your possession, dominion and/or control.

          Des.

          Comment


          • #6
            Key words here are: "I tell my clients ..." ; with an attorney on our side and we still lost the money. Oops! Did I tell you that we were advised to protect a business account? We emptied the other (joint, normal) and put everything into the business account. I think the trustee had a field day when he saw the money laying there, just waiting to be taken away. Double Oops!!

            Now every time my attorney advises me of something I check with your Forum first.
            Ch.7 filed: 2/23/2011 Discharged: 7/7/2011 Asset: Yes Case Closed: 7/30/2013

            Comment


            • #7
              Originally posted by APL View Post
              ... if Stan had written a check to pay for his rent would this have been an issue?
              Depends. If the check would have cleared the account prior to filing, no problem. It if was outstanding, problem -- because the trustee will look to see what's in the account on filing day. If the cash can't be exempted, it's easy pickins.
              There are two secrets for success in life:
              1.) Never tell everything you know.

              Comment


              • #8
                Originally posted by stanpendula View Post
                Did I tell you that we were advised to protect a business account? We emptied the other (joint, normal) and put everything into the business account. I think the trustee had a field day. . .
                I am going to venture a guess that the Trustee had a field day because you transferred cash that was in your personal account to the entity account. That would be deemed a "fraudulent conveyance", recoverable by a Trustee. What might not have been recoverable would have been cash sitting in the entity account that actually was earned by and belonged to the entity - and the entity had its own debt in excess of the funds in the account. I can't imagine an attny telling you to transfer personal funds to the entity. This is "bk 101" Maybe you misunderstood him - is that even remotely possible?

                Des.

                Comment


                • #9
                  we were face to face going over the schedules to be filed that day ... 2 accounts opened , our question was "we consolidate in our joint acct or business acct" -- answer "buss is ok"

                  Until now this guy damaged me with $1,700 that I have to give the trustee because of his mis-advices.

                  When I'll be done, I'll write everything in a blog, because I made every mistake in the book, worse than if I would have been alone.
                  Ch.7 filed: 2/23/2011 Discharged: 7/7/2011 Asset: Yes Case Closed: 7/30/2013

                  Comment


                  • #10
                    There are a lot of people on this forum whose attorneys were stupid, inexperienced, lazy, disinterested, uncommunicative, unavailable, in-over-their-head, misunderstanding the issue, etc.

                    Thankfully, some really good ones posting here in an effort to help people while they can still be helped.

                    Sorry for what you went through, but on behalf of the silent readers who are learning and being helped by your misfortune, thanks for sharing.

                    Once you get all this behind you, you'll be able to focus on the ultimate accomplishment (DISCHARGE!!!) and start over without the debt monkey on your back.
                    There are two secrets for success in life:
                    1.) Never tell everything you know.

                    Comment


                    • #11
                      Des, I've seen this a lot on this board...but - in my state you can exempt (depending on how much you use for protection of equity in your house - I have NO equity) up to several thousand per person in a "homestead" exemption. If you don't use that for your house, you can use it for your bank acct - so as long as it is under the exemption amount, it's ok...I take it this is clearly different in AZ?? (Not that I would have anywhere that much... :-)


                      Originally posted by despritfreya View Post
                      I tell my clients to pay bills with cash, cashiers checks and/or money orders beginning about 30 days prior to filing for this very reason. I make it a point to make them tell me when their account balance is drained. If the $$ is still in the bank on the day you file it is an asset of the bk estate. Hard lesson to learn but the money needs to be gone before filing - and gone does not mean sitting on your dresser in the form of a cashier’s check made payable to the landlord. Gone means gone - totally and 100% out of your possession, dominion and/or control.

                      Des.

                      Comment


                      • #12
                        Originally posted by IamOld View Post
                        ...I take it this is clearly different in AZ??
                        AZ cash exemption (money in the bank) is $150.00 per debtor ($300.00 married couple). No such thing as a "wild card".

                        Des.

                        Comment


                        • #13
                          Originally posted by despritfreya View Post
                          AZ cash exemption (money in the bank) is $150.00 per debtor ($300.00 married couple). No such thing as a "wild card".

                          Des.
                          Thank you Des...wow...that's not much...

                          Comment


                          • #14
                            Reading your answers i was thinking of something:
                            if the money in the business account are gone [to the trustee now]
                            AND
                            if the joint checking was empty
                            AND
                            if he [the trustee] states that we had those rent money in the estate,
                            THEN
                            can I ask for the $300.00 AZ exemption to be deducted from those $1,500.00?

                            Because basically we didn't end up exempting any money.
                            Ch.7 filed: 2/23/2011 Discharged: 7/7/2011 Asset: Yes Case Closed: 7/30/2013

                            Comment


                            • #15
                              Originally posted by stanpendula View Post
                              can I ask for the $300.00 AZ exemption to be deducted from those $1,500.00? Because basically we didn't end up exempting any money.
                              No. There is 9th Cir case law right on point. You do not get to recover an exemption that would have otherwise been allowed if a Trustee recovers property using his strong arm powers. There may be even a Code provision on this since BAPCPA but it has been long standing 9th Cir law for many, many years so I have never bothered to check.

                              Des.

                              Comment

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