I need some advice

[OldKenGoat]

Hi folks,

This is a great board and I've been reading it daily for about 2 months!

I have a question for now, but, first my situation:

I'm 62 years old and have been on Social Security Disabilty for 10 years. My monthly check of $1048.00 is my sole income. I have no assets. I owe $17,000+ in credit card debt and the monthly minimum payment for all is $450+. I'm up-to-date on all payments. The cost of living is high here in Seattle, so, after all CC payments and expenses, I have about $150 left over in my checking account at the end of each month. Yes, I live very frugally.

I plan to file pro se Chap. 7 BK on October 14, 2005. My last cash advance was June 10th and my last CC charge was July 13th. If I discontinue CC payments as of now, I will have accumulated an extra $1,350 in my checking account by the date I file BK. What can I do with the funds to avoid confiscation by the Trustee? I realize I could continue making the CC payments until my file date, but, as has often been pointed out here, that seems to be a waste of good money that I'll need post discharge.

Any ideas?

[edwards2]

From what I have read on this forum I dont think you can have a cc charge or cash advance within I think 90 days of filing? Hopefully, someone will verify that. However, you will need to immediately find household expenses for that extra disposable income. Make a list of your household expenses...ALL of them. You will be surprised, frugal or not, how much you spend just for incidental things. You cannot have anywhere near that much left over if you are planning on filing a Chapter 7. The trustee will immediately force you into a Chapter 13 and disperse the assets among your creditors. The trustee WORKS for the creditors. Look at the expense calculator on this forum and the IRS guide for monthly expenses. It will give you a general idea of what expenses are allowed. Good luck..

[Minnymouth]

From the way you talk I feel that you have "direct deposit" on you checks, right?? And if you stop paying cc right now you will have an extra $1350 in your checking account when you file. You need to have less than $100 in the bank when you file if possible.
Does you car need some minor repairs, maintenance - take care of it now! Pay a house payment ahead (for emergency purposes) or a months rent ahead. Add a little to the electric payment the next two months towards your winter usage. Stock up on some winter groceries. Never know what the future holds! Be prepared! Better it go towards your usage than the trustee take it....

Trustee never bothered any money I had in checking accounts at all...so may not your either.

And also it might be a good suggestion to have a consultation (free) with a lawyer before you decide to file yourself!!! See what your up against.

Minny

[hhou812hh]

The $1350 should be exempt. You may want to go to http://www.bankruptcyaction.com and take a look at your state exemption. In NY for example I have to use the federal exemption of $2500 cash I can keep unless I have a homestead then I'm only allowed to keep I think $1000 cash.

If you happen to pay any bills with this cash try not to exceed $600. You can spend $600 or more on a current purchase such as buying a piece of furniture or a car repair, but don't use it to pay a creditor. The Trustee will only get it back from the creditor and divide it among all of your creditors.

It sounds like from your current income you "should" qualify for a ch7 no problem.

Good luck!

[OldKenGoat]

Comments and more questions

Thanks to all for your suggestions. Unfortunately, I don't own a car so that's out as a possible place to spend my anticipated checking account overage.

hhou812hh - I visited the site you recommended and for the life of me I just don't see where either the Washington State or Fed exemptions will exempt the $1,350. Perhaps I'm missing something!

Minnymouth - Yes, my SSA check is directly deposited to my Bank of America checking account. I also use their Bank-online to pay bills. Which brings up a question. I think I read somewhere on this board that banks usually close your checking account when your BK is filed. If BofA does that I'll have a problem accessing my SSA direct deposit. Has anyone had any experience with BofA in this regard?