Accounts receivable

[kathy4530050]

If we can do that I guess I have misunderstood then. I haven't been on here that long so it is very possible it is ok then.

If we don't do SOMETHING we are going to be in the very awful position of having to go even deeper into debt (like loans from family and friends) just to survive the bankruptcy. I listen to the advice from everyone here who has made it through to the other end in one piece .

[jb300]

If we can do that I guess I have misunderstood then. I haven't been on here that long so it is very possible it is ok then.

[kathy4530050]

Cash on hand. The 2 attorneys I have been to see have both said on the day I file no more than $1000. in any account or cash on hand.

Hmmm . . . I'm doing exactly what has been suggested here over and over again, and that is to pay for things like groceries with a debit card and then get a little cash back--not a lot, just $25-$30. But, over time, these small amounts add up and give you just a very little bit of security.

[jb300]

Cash on hand. The 2 attorneys I have been to see have both said on the day I file no more than $1000. in any account or cash on hand.

[kathy4530050]

I thought we had to report cash also am I wrong on that because I could be putting cash back but everything I have read is saying cash also.

I'm not sure what you're saying about reporting cash--do you mean cash on hand or reporting cash payments?

[jb300]

I thought we had to report cash also am I wrong on that because I could be putting cash back but everything I have read is saying cash also.

[kathy4530050]

JB,

I know your frustration. I am self-employed too and in February had about $25,000 come in that was long overdue from contracts completed in 2008. The problem was that all of the expenses associated with that income belongs to the fall of 2008, and so it looks like the $25,000 is all net--not gross.

Now I have to wait until this income drops off. I have to plan my work so that projects are pretty evenly spaced out and I am going to try to push some work off to the end of the year. I hope to file in September.

I think careful, careful planning is the key here. With some of the $$ that came in I bought a small freezer and then stocked it with meat and frozen vegetables. I went to Costco and stocked up on tons of canned/boxed groceries and household supplies. I also made some extra large utility payments so that I will always be a little bit ahead. I also take a little cash out of the bank each week and keep it in a jar in the house.

In this way, when I am ready to file, the house will be stocked with food and other necessities, my utility bills will be low, I'll have some cash on hand, and I can get by for several months with very little money in the bank.

Having said all that, I still feel like I'm kind of paralyzed in terms of work. I am actually afraid that if a great project comes my way, it could totally jeopardize the bk, so I'm just treading water right now. Not moving forward at all. I hate it, but don't know what else to do.

Hang in there . . . you've got lots of company here. Self-employed people post here all the time and I think most of us feel your frustration. Definitely not easy, but that's why we have to keep looking toward the light at the end of the tunnel. A year from now, this will all be behind us, right?

[jb300]

I know this is driving me nuts. We can't have more than $1000.00 in cash, accounts or nothing. How am I suppose to function? I can't take accounts receivable and pay it all to the trustee and then figure out how I am suppose to pay subcontractor labor out of it or buy the fuel to get me to work and pay bills.

This is going to have to be precisely timed. I need a strong drink and I haven't even got a good start yet!

[nodollarsnomo]

I Feel Your Pain

My husband also has a small business, s-corp 100% ownership. We do seasonal work. The last payment we receive from this work is in January.To supplement this income we also do remodel work. The seasonal work is on a year to year contract. We submit our bid at the first of each August and know by the end of August if the job is ours.

We try to keep money in the business acct to last thru the year. Part of our contract is to store and maintain our clients property thru the year. So this means renting a large building that we pay on monthly.

What really has my head spinning is the fact that you can't have money in your accts. at the time of filing. It scares the heck out of me the thought of spending down our cash since we don't know if we will have more coming in.

I wonder how small business owners manage to file for BK.

[jb300]

This is really going to be bad because I have a big job coming up in May that there is going to be about 4K in labor and another 2K in a referral and there is no way that my BF is going to stand for the Trustee to take that.

I can always wait but then every month I wait that causes my equity to increase in my house and I don't think my house is completely protected. I don't have a straight answer on that though yet. I thought my home would be protected.

I just feel like I am going in circles.

[jb300]

What if I haven't started the job? I know that until I go to that house and do the work that they can still back out?

[StartingOver08]

No, it is not just the day you file. The A/R is for all incoming receiveables as of the filing date.

It is the worst thing about filing when you have a small business. You MUST have a good attorney to have a strategy that will work for you.

[jb300]

What is the deal with this that the Trustee can have my accounts receivable? Here is the deal... I am in the busy part of my year as I have bigger checks come in I have to bank it for later in the year when my business is slow.

Also when my checks come in that is what I pay my bills with and my sub contractors wages out of. Does this just mean on the day I file checks that come in or does it mean that money I know I am going to have coming in from jobs that I have not been paid for yet?

I simply can't afford to let the trustee have all that money. I would have no way to even get to my jobs if he takes all the money I know is coming in. If it is just what is coming in the day I file that won't be a problem. I might get a check or 2 a week and sometimes nothing comes in for a week but I may know that it is coming in.