Filing on payday?

[BkJay]

I get paid Friday after 2:00, can I file Friday morning or is filing on the same day a bad idea? I can't get my check until after 2 and could file before noon but am afraid that since my check is above the Ohio exemtion limit it might be a problem. I am scheduled to have a phone conference with the paralegal tomarrow morning,and ahe said we would sign Thursday and file Friday. will she change the filing time after finding out when I get paid?

[helpmeout]

Why not file the day before?

[sadbutinneed]

I'd file the day before. Is your check going to go to secured or necessary bills quickly? The other option is to pay your bills quickly and file on Monday?

[blessed]

I wouldn't file on payday. They want the amount of your assets, bank account or cash, on the day you filed (it doesn't matter morning or afternoon). We filed on Thursday.

If you can't get it pushed up I'd ask the paralegal to wait until some bills have been paid to send it through.

[BKDefender]

I would NEVER file a client's bankruptcy on their payday. After they get paid, they immediately get money orders to pay their bills or pay them with a debit card online and once the debits have all cleared we then file. No checks.

The trustee doesn't care if you have a check for your car note that hasn't cleared - you'll get dinged for having the money in your account as an asset (if it puts you over the limit) and you still have to pay your car note after paying the trustee for the excess amount remaining in your account because of the not-yet-cleared car note check.

Don't write checks for one or two weeks before filing bankruptcy - use money orders or direct debits to avoid this problem.

William

[coolmom04]

The trustee doesn't care if you have a check for your car note that hasn't cleared - you'll get dinged for having the money in your account as an asset (if it puts you over the limit) and you still have to pay your car note after paying the trustee for the excess amount remaining in your account because of the not-yet-cleared car note check.

William, is this the case in all states? My husband got paid on Friday. I had wanted them to file Thursday for that very reason and kept expressing my concern about filing on/immediately after payday b/c the attorney wanted to file Sunday (yesterday). The attorney & his assistant kept telling us it was okay b/c we're allowed to have money to sustain our family (pay our bills, etc.,) and that they wouldn't/couldn't take that from us - we just can't have "extra" money unless we exempt it - like the $2,000 in savings that we exempted. It still didn't sit well with me b/c of everything I have read here, so I just wondered if this was the case for every state. The attorney apparently did NOT file this weekend like he said he'd do, so I don't know what is going on now. Maybe he'll end up waiting until next weekend.

[BkJay]

I just had my phone interview with the paralegal and she told me to just deposit my check on Saturday and it would be ok.I thought this is a no no to hold out for a day but she must know what shes talking about because they have been doing bk's for 20 years now and thats all they do.She said as long as we don't have more than $800 in the bank combined on the filing day we are ok,but I thought by holding the check it was considered matress money and needed to be claimed. Am I missing something? I have confidence in my attorneys office,but I don't want to do anything dishonest or shady.

[SMinGA]

Coolmom, it can vary by state. Some states have very limited exemptions and NO wild card to exempt cash/liquid assets. Other states have more lenient exemptions - especially if one does not have home equity to exempt. (And these days, with the failing housing market, many are upside on their homes with no equity to speak of.)

[DebtHater]

Thinking about it, we did file on payday (direct deposit). We had our interview with the attorney on that day to finalize the petition and it was filed and had our case number before we left the office. The approximate amount in checking at that time was about $1000.

The attorney was not concerned with the amount of money we had in our account or amount on hand.

[helpmeout]

I just had my phone interview with the paralegal and she told me to just deposit my check on Saturday and it would be ok.I thought this is a no no to hold out for a day but she must know what shes talking about because they have been doing bk's for 20 years now and thats all they do.She said as long as we don't have more than $800 in the bank combined on the filing day we are ok,but I thought by holding the check it was considered matress money and needed to be claimed. Am I missing something? I have confidence in my attorneys office,but I don't want to do anything dishonest or shady.

You would then need to list the payroll check as an asset. Just because you delay cashing it doesn't mean that it won't be included in your BK estate.

Filing the day before you get paid is really much simpler and safer.

[BKDefender]

Debthater - in Nevada, we're allowed $1k per filer ($2k for married couple) for a 'wildcard' exemption ('Any personal property').
If a married couple only has $1k in their bank account, I don't care either.
The problem is not that they have payroll deposited into their account - the problem is some people still pay bills with actual checks that take days to clear after the company receives the check.
As an example: $2,500 deposited into client's account on January 1st. Client writes $300 check to electric company, $100 check to gas company, $300 to car loan company, then files bankruptcy 3 days later without any of those checks having cleared their account.
In Nevada the client would have to list a current balance of $2,500, regardless of any outstanding checks, and would owe the trustee $500.00 for non-exempt personal property.

The client would then have those checks clear and have $1,800 in their accounts - $500 of which they have to pay to the trustee, netting them $1,300 remaining.

If they would have taken out money orders and mailed them, they would have $1,900 in their accounts and be within the $2,000 personal 'wildcard' exemption and would get to keep it all.

That's why I tell people not to write checks so there's no problem with check float immediately before filing.

--William

[JackBondLove]

I would NEVER file a client's bankruptcy on their payday. After they get paid, they immediately get money orders to pay their bills or pay them with a debit card online and once the debits have all cleared we then file. No checks.

The trustee doesn't care if you have a check for your car note that hasn't cleared - you'll get dinged for having the money in your account as an asset (if it puts you over the limit) and you still have to pay your car note after paying the trustee for the excess amount remaining in your account because of the not-yet-cleared car note check.

Don't write checks for one or two weeks before filing bankruptcy - use money orders or direct debits to avoid this problem.

William

Agreed. I had to pay some folks near the time of the filing (including the attorney!) so I did it all in cashier's checks so that there was no problem of when the money was out of the account.

I would agree with everyone else. Just have the filing date be the day or two before the *official* payday (contact your Human Resources to get that info.) You can prepay all your insurance or utilities one month in advance without a problem as well.

[tigergem]

I filed the day after I got paid, and just paid my bills as usual, and it didn't matter to my trustee that my balances were kind of high on the day I actually filed. Of course, that might not be the norm. I have a kind of cool trustee who has a lot of common sense.

[redyhws]

If you file before you get paid, does the trustee have a claim on the unpaid wages that are due but not paid yet (i.e., like a garnishment)? Sort of like tax refunds: such amounts have accrued prior to the day of filing, but have not yet been paid. Yet, aren't they still property of the bankruptcy estate because it was money you were owed as of the filing date?

[BKDefender]

redyhws: Yes the trustee has a claim on the unpaid wages that are due. Here in Nevada 75% of earned but unpaid wages are exempt. In reality though, if someone files on Wednesday or Thursday and gets paid on Friday here the Trustees have not gone after the wages. I time filings to occur when all of the client's bank accounts are at their lowest, which usually occurs a day or two before payday.

--William