cash transactions from checking and chapter 7

[ska]

Ok, have had financial problems for about a year, have not used any credit cards for over 2 years but after my husband got laid off in November he started working for himself. Well to get by each week until he got a check we would trade checks back in forth from one account to another until he got paid, well now my account looks like we deposited a TON of money which in reality is alot less and we would qualify for a chapter 7. Not only is this the problem but Im also afraid that since I was doing that Im going to get in trouble when this comes up in my bancruptcy? anyone have advise or been trough something like this and can tell me how they handle this scenario? Thanks, I m scared to death!

I know just how you feel. We have three separate checking accounts. It used to just be two, but I was afraid that my primary account would be depleted of funds once I stopped paying on a CC that was from the same bank. My other account is a credit union approx. 45 minutes away without a debit card. I basically used that account to "try" to save money. If it was hard to access, I thought it would be easier to save.

Well, my husband gets direct deposit every week and the funds get deposited into two to three accounts. I do not have direct deposit so I would have to walk in my check. Well, the new bank wanted to put holds on it, so I would use the old account and withdraw cash and take it to the new account. What a pain! Well, after a while I realized that my old account was not taking my money, so I started going back to them.

Well, with the three accounts, I transfer money from the other accounts to the one. Plus, the account without the debit card gets my husband's funds a day earlier than the other banks. So, I can write a check from that account sooner and deposit it into my local branch. I guess it's just a way to get paid a day earlier too. I talked to my attorney and she said I shouldn't be too concerned, because I could show that I was just transferring money from one to the other.

After this is all over, I am loosing the newest account, they are a pain!

[StartingOver08]

Ok, have had financial problems for about a year, have not used any credit cards for over 2 years but after my husband got laid off in November he started working for himself. Well to get by each week until he got a check we would trade checks back in forth from one account to another until he got paid, well now my account looks like we deposited a TON of money which in reality is alot less and we would qualify for a chapter 7. Not only is this the problem but Im also afraid that since I was doing that Im going to get in trouble when this comes up in my bancruptcy? anyone have advise or been trough something like this and can tell me how they handle this scenario? Thanks, I m scared to death!

One of the best things to do is plan your bankruptcy. One of the best cures for a situation like this is TIME. Let your accounts settle down. What I mean by that, is do not deposit any more of those checks. Let your six months or more go by using only one account and use the funds you actually receive from work.

This will help you in a couple of ways. First, you need to budget using your current income. If your income is not sufficient, then you really want to hold off on your bankruptcy until you have enough income to support yourselves. Remember, bankruptcy only takes care of the debt, not the income.

Second, by not filing too soon, you will show your actual income which is better to prove you are Ch 7 material rather than Ch 13. This is important to have your data ready in case the Trustee asks for it. I would plan on a min of 6 months with your accounts showing actual income only. JMO. This will make your filing more smooth. I would not want to show bank statments with deposits showing more than what your actual income actually is currently. Why invite extra scrutiny from the Trustee if you don't have to? Since the Trustee's ask for bank statements, you will need to start now and plan on filing maybe the first quarter of 2010 - maybe later. Some people have held off for more than a year.

[Trixie007]

Hmmmm, I would re-think your explanation just in case you are asked! You were charging 1400 per month and spending 1000 per month cash - upon determining the need to file BK you start taking 4000 per month cash, which is 1600 higher? Those are some hellacious job search expenses - to the tune of $400 per week? Not saying you've done anything wrong, just that I wouldn't buy that reason on it's face.

[denisejohn65]

My lawyer said I didn't need receipts either. He said to draw the money out and keep the bal low as I can. I only get alimony and rretirement right now and that is exempt right? I have NO RECEIPTS...341 is July 20th. I believe I'm a no asset case too. Will they ask for this? Since you can see on my statements where I've taken it out.

[Stressedout7]

Has anyone dealt with this scenario

Ok, have had financial problems for about a year, have not used any credit cards for over 2 years but after my husband got laid off in November he started working for himself. Well to get by each week until he got a check we would trade checks back in forth from one account to another until he got paid, well now my account looks like we deposited a TON of money which in reality is alot less and we would qualify for a chapter 7. Not only is this the problem but Im also afraid that since I was doing that Im going to get in trouble when this comes up in my bancruptcy? anyone have advise or been trough something like this and can tell me how they handle this scenario? Thanks, I m scared to death!

[bkfdrusa]

See, I was withdrawing $1000 per week. which comes to 4000 per month. When I was using my credit card earlier, my monthly credit card bill was around 1400 per month. I was withdrawing almost around 1000 per month even when using credit card. So, my total montlhy expenses are 2500 per month. And when I am not using my credit card, I have to withdraw cash only. Correct?. Because I did not had job, you have to add my job search expenses also. So, I think I am ok.

[AshShep01]

I was withdrawing almost $1000 every week in Jan to Mar. I think we can tell them going to clubs, casinos, and other regular food expenses for a family of 4.I stopped using my credit cards, so used only cash for expenses. If he does not rrust me, I do not have an answer for that. May be I will end up in trouble. But my lawyer said that the trustee should not ask those questions. See, you can take your wife out for dinned every night to a grand restaurant, Trustee should not say no to that. My lawyer said that my Trustee do not ask for bank statments even.

Also I don't think it would be in your best interest to tell the UST. You were taking cash out for clubs, and casinos. Yes, to the food expenses. Did you include that in your budget?

[AshShep01]

Well the money is gone. What can they do?.

They can deny your petition and dismiss your case. You have to be really careful when handling cash during your BK. The UST might feel like the cash you were keeping on hand for pleasure. Could have help to pay some of your debits back. My UST even wanted copies of my Rent checks because of the $$$ amount. She wanted to make sure I wasn't writing the checks to friends or family. So good luck.

FILED 02-15-2009
341 MEETING 03-25-2009
RE-AFIRM HEARING 06-08-2009
DISCHARGED 06-16-2009
PRO SE

[bkfdrusa]

Well the money is gone. What can they do?.

[tinfoilhat]

Only mean trusties will do like that. Even then money gone is gone. They cannot deny your petition based on that. Everyone has a right on their own money. you can spend it however you like.

Very untrue. From what I've been told or have read on here.
Excessive spending on non necessities is a big no no and the trustees are going to go after the amount you spent or the stuff you spent it on.

Again, that what I've been told by people on this site. It's hiding it so the trustee can't give it to the creditors, it's fraudulent, it's unethical, etc.

[bkfdrusa]

Only mean trusties will do like that. Even then money gone is gone. They cannot deny your petition based on that. Everyone has a right on their own money. you can spend it however you like.

[Amy26]

I was just at my lawyer's office handing in my bank statements and stuff and I actually feel a lot more at ease than I did before. They told me the trustee I have is really nice and one of the legal assistants actually had the same guy for her bankruptcy. They said I don't need receipts and that he really doesn't care about the transactions on my bank statements but the available balance the date I filed. They said he's really quick and very nice. They even gave me a list of the questions he's going to ask me and told me to fill it out and just hand it to him at the 341...

I think it varies greatly between districts and what kind of case you have. I'm like 30k under the median and don't have anything that really sticks out. So, its very hard to tell someone with a totally different case in a totally different state "no you don't need receipts you will be just fine".

My only problem now is hoping I don't have any issues with my creditors themselves. As I've mentioned, I've used a couple of my credit cards very recent to filing and did those 2 Discover balance transfers like 94 days before I filed.

[bkfdrusa]

I was withdrawing almost $1000 every week in Jan to Mar. I think we can tell them going to clubs, casinos, and other regular food expenses for a family of 4.I stopped using my credit cards, so used only cash for expenses. If he does not rrust me, I do not have an answer for that. May be I will end up in trouble. But my lawyer said that the trustee should not ask those questions. See, you can take your wife out for dinned every night to a grand restaurant, Trustee should not say no to that. My lawyer said that my Trustee do not ask for bank statments even.

[AshShep01]

does cash withdrawls in the months leading up to bancruptcy cause a problem? my husband has a habit of taking money out a couple times a week for expenses and living, about 400.00 a week? will this be a problem?

I was taking out around $500.00 every two weeks. At my 341 Meeting my UST, had all those transactions highlighted. She asked me exactly why was I withdrawing that amount? Where was the money going? So just be prepared.

FILED 02-19-2009
341 MEETING 03-25-2009
RE-AFIRM HEARING 06-08-2009
DISCHARGED 06-16-2009
PRO SE

[bkfdrusa]

You do not need to worry about receipts. No one is going to look at each and every line of your bank statements.