Planning ahead for cash

[awoodwaring]

I will be getting some cash back from an auto accident before I file. Can I turn that into 3 money orders payable to my mortgage lender to get it out of the bank and, yet, still do something useful (as well as, ethical) with it? The months of not paying the mortgage would help us redeem one of our cars.

Thanks!

[daylate]

If you are talking about sticking the 3 mo's under your mattress and not mentioning them I believe that would be considered hiding assets and would not be advisable. You would be better off waiting three months to file if that is the only way you had to get rid of the cash. Another option is to exempt the cash. I don't fully understand CA exemptions but I know you have 2 options one of which might provide enough to cover your cash.

What do you mean by redeeming a car? Catching up on payments? Buying back equity from the trustee?

[LadyInTheRed]

If you don't have equity in your house, you can use the System 2 wild card exemption to protect over $23,000 in assets of any type, including cash. See my blog entry on CA exemptions for more info. http://www.bkforum.com/entry.php?336...tcy-Exemptions

[JJCA]

I have been 'advised' that personal injury settlements are exempt in CA. You should check into that further. I have the same issue (car accident settlement) & was told it would be ok..but have not hired an attorney so don't know 100% for sure.

[awoodwaring]

I am afraid we may have equity and I don't want to take any chances of losing the added money from my accident. We are really close on our equity and live in a very eclectic area in the "country" with leaning mobile homes on 5 acres full of weeds next to brand new mansions on 5 acres with barns and cross fencing. We bought our house for $250 one year ago (we owe $242), but the generic appraisals are all over the place from $279 to $350! We have no other assets (with the exception of the money from the insurance reimbursing my car). I will have a personal injury suit, but don't know what it will be (only that it will be less than the exemption amount).

Anyhow, if we have over 20k equity (which we might, depending on the appraiser), we have no wild card exemption to use. So, we can't have any money in the bank. We have a gazillion things to do with the money, being on 5 acres with all sorts of critters and a garage about ready to cave in, a leaking well and an unmaintained septic system.

I won't be hiding money under my mattress. But, I would like to put it to good use and not lose it if we have too much home equity. If I could get money orders to pay the mortgage in July, August and Sept, that would free up the money to buy back our car for market value. The credit union that holds the car lien was a nightmare to deal with when we tried to short sale our other house (they refused, said they would rather see us be foreclosed on than forgive our $32 loan, even though both my husband and I were laid off from our teaching jobs). The credit union has already kicked us out of the membership, though they hold the loan for the car. So, I figured I should try to buy back the car rather than reaffirm with them.

[AngelinaCatHub]

I am afraid we may have equity and I don't want to take any chances of losing the added money from my accident. We are really close on our equity and live in a very eclectic area in the "country" with leaning mobile homes on 5 acres full of weeds next to brand new mansions on 5 acres with barns and cross fencing. We bought our house for $250 one year ago (we owe $242), but the generic appraisals are all over the place from $279 to $350! We have no other assets (with the exception of the money from the insurance reimbursing my car). I will have a personal injury suit, but don't know what it will be (only that it will be less than the exemption amount).

Anyhow, if we have over 20k equity (which we might, depending on the appraiser), we have no wild card exemption to use. So, we can't have any money in the bank. We have a gazillion things to do with the money, being on 5 acres with all sorts of critters and a garage about ready to cave in, a leaking well and an unmaintained septic system.

I won't be hiding money under my mattress. But, I would like to put it to good use and not lose it if we have too much home equity. If I could get money orders to pay the mortgage in July, August and Sept, that would free up the money to buy back our car for market value. The credit union that holds the car lien was a nightmare to deal with when we tried to short sale our other house (they refused, said they would rather see us be foreclosed on than forgive our $32 loan, even though both my husband and I were laid off from our teaching jobs). The credit union has already kicked us out of the membership, though they hold the loan for the car. So, I figured I should try to buy back the car rather than reaffirm with them.

Your money to improve your well and septic is a must. That would be exempt. I'm not understanding the need for money orders to errr, tuck under the mattress? You need to purchase needs of exempt status. If you hide "under the mattress" to buy back a car, that is fraud. Spend this money before filing on real needs that are exempt. I don't know CA exemptions so do what's right.

We here won't support any kind of aid in hiding assets, but you can bet we will help you with real aid in exploring the best way to use your insurance to fix things and help in anything that is above board and exempt. Even if you have a five acre place full of critters, you need to feed them and yourselves. Purchase of exempt foodstuffs and paper products are exempt. I would advise to bring up your car to current then if you wish to keep it reaffirm. Don't pay it off as then is could become an asset. Best I can do under the current info. 'Hub

[awoodwaring]

Your money to improve your well and septic is a must. That would be exempt. I'm not understanding the need for money orders to errr, tuck under the mattress? You need to purchase needs of exempt status. If you hide "under the mattress" to buy back a car, that is fraud. Spend this money before filing on real needs that are exempt. I don't know CA exemptions so do what's right.

We here won't support any kind of aid in hiding assets, but you can bet we will help you with real aid in exploring the best way to use your insurance to fix things and help in anything that is above board and exempt. Even if you have a five acre place full of critters, you need to feed them and yourselves. Purchase of exempt foodstuffs and paper products are exempt. I would advise to bring up your car to current then if you wish to keep it reaffirm. Don't pay it off as then is could become an asset. Best I can do under the current info. 'Hub

Maybe I am not explaining myself very well? I would buy 2 money orders made out to Bank of America (our mortgage holder) and send them off July 1st and August 1st (assuming we file in June). So, I am using the money for my mortgage, not to hide. If that is still considered fraud, that certainly was not my intent! I'll buy pig food, instead.

Also, we are current on everything except our second house facing foreclosure.

[btbeme]

You will be asked under oath about any money owed to you from earnings, lawsuits, etc at your 341. Whether or not the checks are made out to you is irrelevant - it is money owed to you. You need to receive the money and use it for allowable expenses before filing. Period.

If you have expenses that are necessary to maintaining the value and habitable status of your property, spend it there. Get receipts.

Pre-paying a mortgage by more than a month will get most Trustees sideways, and would likely elicit a much closer examination of your filing. There isn't much worse than spending the money only to have the Trustee demand it from you anyway.