Trustee and bank accounts

[sassiebaz]

Ok, I know I have to disclose everything. Im not trying to be deceitful or anything. I just am curious about something. I have a bank account with my mother. She lives in another state. We only share this account so if one needs to borrow from another or pay a bill for another, this is an easy way to do that. So, I gather my 90 days of bank statements and Im disclosing all of this to the my attorney and trustee. But, how does the trustee know what part of the balance, deposits and activity are mine or my mother's? Does he go through this with a fine tooth comb? What if I put my student loan check in this account and being that I spent it in the period of a month and a half...is that income? So, yes, this is not just a one part question. I always feel like if I ask my attorney this, they will think Im trying to be secretive. Im not, just want to know how it's all figured out.....

[justbroke]

I'm going to answer this simply. Yes the Trustee is interested in these types of accounts because avoidable (recoverable) insider payments can be hidden here. Having wrote that, the Trustee will be interested if the amounts of money running through that account appear to be "significant". I don't know what's significant for your Trustee.

I would expect questions on this account, and you need to have a good accounting detail for this. My question right off the bat is... why did you put your Student Loan check into a shared account?

See... this is going to lead to some very interesting discussion with the Trustee. That's if they get "interested" because the amounts appear "significant' to them. That student loan check would certainly peak my curiosity!

[ready2puke]

Maybe you can change the status and only be a signer on that account. Thats what I do for my Mom...Its her account but I can write checks to pay her bills and deposit her money..but its not my account and my name is not on it except as as signer..I'm her Power of Attorney...maybe thats why I can do that..I just thought of that, so maybe that wouldn't work for you..

[sassiebaz]

Yes, it's my mom's account and she added me to it. Well, honestly, justbroke, I wasn't expecting to file this soon. We figured it would be a few months down the road. We only filed an emergency because we didn't have a back up plan for another vehicle and we cannot share one vehicle. So, you think Im screwed? By all accounts, I thought a student loan was NOT considered income. The bank statement shows all of the debits and activity as to where this money went. it was gonein a month and I didnt buy anything luxurious. Nor, did I pay any creditors with it. Please elaborate on what red flags this can bring up....

[sassiebaz]

Maybe you can change the status and only be a signer on that account. Thats what I do for my Mom...Its her account but I can write checks to pay her bills and deposit her money..but its not my account and my name is not on it except as as signer..I'm her Power of Attorney...maybe thats why I can do that..I just thought of that, so maybe that wouldn't work for you..

I was told changing or transfering your name on anything can be found out as well.

[justbroke]

Yes, it's my mom's account and she added me to it. Well, honestly, justbroke, I wasn't expecting to file this soon. We figured it would be a few months down the road. We only filed an emergency because we didn't have a back up plan for another vehicle and we cannot share one vehicle. So, you think Im screwed? By all accounts, I thought a student loan was NOT considered income. The bank statement shows all of the debits and activity as to where this money went. it was gonein a month and I didnt buy anything luxurious. Nor, did I pay any creditors with it. Please elaborate on what red flags this can bring up....

Your would tell the Trustee, just what you wrote here. I'm just suspecting that the Trustee will become "interested" in that account. As to how far they go with probing into the various debits and credits, who knows.

I understand your frustration with the whole thing, but it is what it is. I'm just providing you some up front awareness that this joint account could raise a red flag. Usually it's the amount (and maybe number) of the transactions in the account. Remember, the Trustee is looking for money to recover. The Trustee makes money based on how much money s/he finds.

The real truth behind all this, is that it won't hurt you personally. If they find that you made insider payments, they will go after the payee. I'm not a lawyer and don't know specifics of how it could be treated. I wouldn't be overly alarmed by this revelation, only I would be prepared for it. Be prepared to document where all the debits and credits came from and went to, or vice versa.

In the end, it may be a non-issue with the Trustee, but it's better to be prepared with the documentation.

[sassiebaz]

I agree, that is why Im so curious. I will definately ask my lawyer about it at great length to see what he thinks. Im thinking because we most likely will be paying back a bare minimum, if it is an issue, that will be the reason. To find a way to make us pay more. The loan was for $3500.00 and I used it to pay tuition, books, and then just household bills. Gas, to see my dying grandmother in the next state over, and clothes and food. Anything sound alarming?

[justbroke]

I agree, that is why Im so curious. I will definately ask my lawyer about it at great length to see what he thinks. Im thinking because we most likely will be paying back a bare minimum, if it is an issue, that will be the reason. To find a way to make us pay more. The loan was for $3500.00 and I used it to pay tuition, books, and then just household bills. Gas, to see my dying grandmother in the next state over, and clothes and food. Anything sound alarming?

Those are absolutely justifiable expenses. The issue remains... it's a joint account with money from (and access to) the account by a third party (not subject to the bankruptcy). That's the only issue.

You spent the money on the right things. I don't think anyone would question your "living" expenses. It's just that it's joint. As with all accounts, you probably want to ask your lawyer about any funds still in the account. Generally, people have kept less than $100 in their bank accounts on the day of filing.

[sassiebaz]

Oh yeah, there is only $9 in there. However, here is another issue I have a question about. The day we filed(emergency)I had deposited $1600 to pay the attorney. His secretary ran my debit card. That same day we decided to file and the debit was still showing as pending. It didn't clear until two days later. My bank statment does show the available balance the day we filed as $113 but the balance was $1883. I talked to the bank and they said they can write a letter if more clerification is needed, but the balance(technically) the day we filed was $1883...yikes....is there any way to argue that to the trustee?

[justbroke]

Absolutely nothing to worry about. (My simplest answer of the day!)

[StartingOver08]

Your attorney messed up with the debit card process. He knows that the funds have to clear the account. Mine was very specific, had to be paid by cashiers check because the funds have to be out of the account before the filing date.

The Trustee may leave it alone because the funds went to your attorney and not to some other creditor. Hopefully your Trustee will look at it that way.

[optimistic1]

Your attorney messed up with the debit card process. [/B]

With a note from the bank and the attorney verifying the charge went through that day, it should shoot down any argument from the trustee. Good tip though, dont use a debit card, only cashiers check.

[justbroke]

Your attorney messed up with the debit card process. He knows that the funds have to clear the account. Mine was very specific, had to be paid by cashiers check because the funds have to be out of the account before the filing date.

What StartingOver is writing about is true. However, I tried to keep at least one of my answers today, short and sweet. Bottom line, it's probably a non-issue.

With it being a Chapter 13, I don't see any specific issue with this. I had things pending (a mortgage payment) as well. The payment was due prior to the petition date, but the Bank hadn't cashed the check yet. It would have been money going to a secured creditor anyhow. No one ever said anything.

[sassiebaz]

Well, let's hope that is the case with us. I feel a little more relaxed. But, this whole process is like being audited from the IRS. which I actually have never had happened. But, it makes me feel like Im doing something wrong even though I haven't been. I hate feeling like this! Thank you all for your responses. What would I do without you????