Take all Money out of bank before filing BK!

[technoreid1]

Take all Money out of bank before filing BK?

I was told by my attorney to take money out of my bank account before time of filing BK.

Said it was ok to have a "small" amount. A few hundred.

Does this sound accurate?

Also my wife gets direct deposit from her employer into our bank.

Would this affect anything when we file or during our BK?

Thanks, techno

[keepmine]

On filing date, be sure all checks have cleared and you have cash below the amount your state exempts.

[DontBother]

I could see a few problems with this...

First, part of the assets you have to list is "cash on hand". Yeah you could lie, but that is also fraud.

Secondly, the trustee could look over you bank statements and want an explanation for all the withdrawals.

I would just do what keepmine said, make sure that all (legitimate) checks have cleared your account before you file. And if you get paid right before you're going to file, maybe get some cashier's checks to pay your bills. That way the cash will be out of your account, but it would be legit. Just keep copies of the cashier's checks.

[technoreid1]

I am now very confused?

Are we not supposed to use our checking accounts during our BK?

Are we not supposed to have direct deposits from our employer?

thanks, techno

I could see a few problems with this...

First, part of the assets you have to list is "cash on hand". Yeah you could lie, but that is also fraud.

Secondly, the trustee could look over you bank statements and want an explanation for all the withdrawals.

I would just do what keepmine said, make sure that all (legitimate) checks have cleared your account before you file. And if you get paid right before you're going to file, maybe get some cashier's checks to pay your bills. That way the cash will be out of your account, but it would be legit. Just keep copies of the cashier's checks.

[SinkingFast]

If you can get paper checks from your employer, it gives you better control over your money as you near filing time.

Yes, you can use your checking acct. But the closer to filing you get, the less you wanna depend on Checks. Checks take time to clear.

Use Money Orders to pay bills and make purchases with your Debit Card instead. No waiting for checks to clear that might make your bank balance on filing day look artificially high.

[jp2861]

What you don't want to do is take a big chunk of cash out right before you file, unless you can prove it went to bills. The trustee will ask what the money went for. If you do make a big withdrawal that you can't account for the trustee may claim it as part of your estate and take it. If you have extra cash buy extra meats, pay your car insurance for the quarter, get your teeth cleaned, car tuned, etc.

[oldbaddebts]

To clarify:
Any funds in your accounts over what you are allowed to exempt at the time you file belong to the BK trustee. In my state, you can't exempt any, so I have $0.91 in my account, and if he asks, I will gladly give it to him. The next day, the account is yours to do as you wish with, but I wouldn't recommend depositing that $10 Million in cash you have had in the mattresses all this time quite yet.

[twuoo]

How would it look to drai the bank account to pay student loans earlier in the month, before the actual due date, end of month?

[HeatherB]

Extra money for me went to future things...... size 4 diapers when my son was only in a size 2. Formula and more formula. Oil change, making insurance payment in a lump sum instead of monthly payments, etc. Cash your check, but don't put it in the bank. Instead take the cash home. Use the money already in the bank for bills, groceries, etc until it is low enough.

That's what I would do. Just my thoughts.

[Minnymouth]

Id sure go ahead and pay those student loans and get those funds out of my checking account.

The least you leave in your checking account, the better on the day that your case is filed.

[Chicago]

I'm signing my paperwork on Monday and it'll be filed electronically within 24 hours. I paid my rent this month with a cashiers check earlier this week and with other expenses (food mostly) taken out this week, I'll have about $15 spread across four bank accounts Didn't plan it that way but it just worked out.

[technoreid1]

What about the day after you file?

Can we just use our checking accounts like normal?

thanks, techno

Id sure go ahead and pay those student loans and get those funds out of my checking account.

The least you leave in your checking account, the better on the day that your case is filed.

[kl030505]

Follow the advice of the attorney. Mine said not to worry that the couple thousand I would have in the acct would be exempt, so I'm not changing anything, but I'd certainly follow whatever advice your attorney gave you for your state.

[jp2861]

How would it look to drai the bank account to pay student loans earlier in the month, before the actual due date, end of month?

Depends how much you're talking about. If it's over 600 I think they can go after the student loan payment, take it back, and disperse it out to all your debts. I would definitely get a reading from your lawyer on how much your state allows you to keep, and how much you should pay on the student loan. Each state is different but your lawyer should be able to plan it out for you. Questions like this are best left up to your lawyer to answer, as they know what the trustees little qwirks are.

[WantToBeDebtFre]

I'd be careful about putting money back into your account right after filing. I just got the random audit and had to show bank statements for the entire month of the month I filed and had to explain deposits over $500 even if they were made after filing. Just a little FYI...