Attorney Meeting today.. question about 341 hearing

[mhp8982]

I met with my attorney today.. and we discussed the $2000 we paid my my MIL back with our taxes for loaning the money for the downpayment on our house that is only in my husbands name (explained this in my thread)

The best idea he had was to have my MIL write us a check for $2000 and deposit it back into our account. That way we can show that she paid us back. And then we can just pay our bills with it.. to get it under the amount we can have when we file. He thought for a minute we could get around it since it was my husbands debt and he was paying his mom back and he was entitled to half of the tax check.. but I signed the check when we wrote it back to her, so he thinks that could cause the problem. He's not sure the trustee will even say anything, but he said it's better to be safe. So I'm just going to pay the mortgage and car payments early a little early and pay our normal bills. Then we can pay her back after this is all over. He just said make sure that we don't pay anything that accumulates to over $600 in payments from over the past 60 days to the day we file.

Now, he told me I could pay any bills or debts even of my husbands (he's not filing) since it's a joint bank account. He said just make sure you haven't paid more than $600 on any debt/bill over the past 60 days.. besides secured debts like the mortgage and car payments.

So he gave me a list of questions that will be asked at the 341 hearing.. and one of them is.. Have you paid any creditor over $600 cumulative within the last year? (this includes yoru house payment and any vehicle payment)

I'm a little confused by that question.. because do I answer yes since we have made mortgage payments (this is only my husbands name) and car payments. The attorney made it sound like this question was for things outside of the house and car payments? But the way it reads, it includes it. So is yes ok to say? And also the other things, outside of the house and cars.. he said as long as you haven't paid over $600 in 60 days before filing.. that it's ok. So I'm thinking that's a totally different thing he's talking about from the question on the list. I'm just confused??

I'm not sure how to answer since my husband isn't filing and a lot of the bills are in his name.. like a credit card, cell phones, the house, medical bills, etc. I mean yeah with my student loan I paid $50 a month for the past year.. so that's $600.. and my car.. it's $173 a month.. so that's well over $600. So I'm just not sure what the question is asking. I think those are the only things in my name that i've paid that much on.

Thanks so much!!

[debee]

When you file you'll submit a document called "statement of financial affairs" (SoFA). You will be listing all your payments in question 3 of the SoFA so you will be able to answer any questions at the 341 by referring to your documents.

The trustee is going to be looking to make sure everyone is treated fairly in the days leading up to your bk and that there were no "preferences".

If you had an aggressive creditor that hounded you for money and got more than they should have, the trustee would be able to go after that money and then split it fairly among all your creditors. Same if you paid your dentist bill of $900, but didn't pay your VISA. Trustee could go after that and then split it up fairly.

Payments to a fully secured creditor aren't preferences because the creditor didn't get more than he would have in bankruptcy, where the creditor would get the value of the collateral.

You can go here and download the form. It's offical form B7. http://www.uscourts.gov/FormsAndFees...ptcyForms.aspx

EDIT TO ADD: You only list payments in the 90 days before filing, not the whole year. Except for payments to insiders. The lookback for those is a full year.

[mhp8982]

I'm pretty sure we filled out the SoFA today. My attorney did say that the trustee here always asks that question wrong and says the whole year, but it's actually only 60 or 90 days. So how would I answer that question then? I don't even count the mortgage payment do I? since that's only in my husbands name.. that's not a debt of mine?
So, as long as I haven't paid more than $600 to any one debt over the secured debts, within 60 to 90 days before filing.. all of that will be fine?

The "insider" situation is what happened with my MIL.. as I said, I wrote my story in my first thread. But my MIL loaned my husband $2000 towards our down payment on the house last october. We paid her back out of tax check. She cashed the check on February 22nd.. and I'm the one who signed the check from our joint bank account. She cashed it within the 3 months of paystubs that we have to give to the trustee, so he's going to see it. Of course, when we gave her that check, we were not behind on anything and we had no clue we would be filing bankruptcy in 3 months.. it was just a week ago, I found out they are coming after me for something that we thought was settled 2 years ago.. that was my ex husbands responsibility in the divorce. He let our house go into foreclosure.. it was sold and now they are coming back for the difference. So in this case, we had absolutely no idea this was going to happen so sudden. So this is why he suggested having her write us a check for $2000 stating she is paying us back in the memo, and deposit into the same account before filing for bankruptcy. So we can show that yes, we gave her this money, but she paid it back to us.. and we then used it to pay our bills. Which is what we plan to do with it. We will pay our normal bills, mortgage and carpayment, etc. This way we are covered and safe if he does question it.

[debee]

I remember your earlier thread and really like the solution your attorney came up with. Smart cookie. I will remember it and share it with others in the future.

As for how to answer the question, it will depend how it's phrased. If he asks you to tell him about all payments (secured and unsecured) then you do that. If the mortgage is paid out of the joint account, I would include it as per your attorney's advice. You want to disclose and not appear as if you were trying to hide anything. Just answer truthfully and let him sort it out. You know and understand what he's looking for so you have nothing to fear.

I like your lawyer.

[mhp8982]

yeah, I was a little concerned with having all of this activity on the bank account right before filing.. but I guess it doesn't matter!? My attorney has been doing it for 35 years so I guess I can trust he knows what he's doing. He is a good attorney... seems like everyone in town recommends him. I'm sure many people try to spend their money down to the amount they can have right before filing so it's not unusual to the trustee.

Do you really think my attorney's plan will be ok?

Will my attorney be able to talk as well, when we are in front of the trustee?

The question on the list that the trustee asks.. is exactly as I showed..

"So he gave me a list of questions that will be asked at the 341 hearing.. and one of them is.. Have you paid any creditor over $600 cumulative within the last year? (this includes yoru house payment and any vehicle payment)"

That's where my attorney says he says it wrong... the trustee says within the last year and he means to say within the last 60 days... cause that's technically what the law states. Don't know about the 90 days you are saying.. maybe it's different in different states?

[debee]

Do you really think my attorney's plan will be ok?

I can't think of a reason why it wouldn't work. The money movement will attract scrutiny so just have receipts & leave a good trail.

Will my attorney be able to talk as well, when we are in front of the trustee?

Yes.

... the trustee says within the last year and he means to say within the last 60 days... cause that's technically what the law states. Don't know about the 90 days you are saying.. maybe it's different in different states?

I'm not sure why you think it's 60 days. Section 547 of the bankruptcy code indicates 90 days except for insiders when the lookback is a year: http://www.law.cornell.edu/uscode/11/547.html

If you look at form B7 from the link in my earlier post, you will also see the timeframes as indicated on the SoFA.

[mhp8982]

how do I leave a good trail? Which reciepts do I need to have? Like the reciept for depositing the $2000 back into the account? copy of the check once it clears the bank? And my bank statements? We aren't going to use it to pay anything except for normal bills, mortgage, car payment, gas and groceries..only needs.. no wants. Should I keep all of those recipets after depositing the $2000 you mean? We pay virtually everything online.. and we will give him an update of our bank statement on the day we file.

Maybe my attorney meant to say 90 days. meaning the trustee says it wrong.. it's 90s days not a year for all other things. I'll make sure I go by that rule.. in making sure I don't put more than $600 to any bill other than mortgage and car in the past 90 days.

We are only giving him 3 months of bank statements. And an updated printed statement on the day I file to show the balance in the account at that moment. How will he look back over the year? Or will he have to have something suspicious to make him do that? That $2000 check is in the last 3 months of pay stubs.. there was no other large amount in the past year, other than mortgage payments and rent payments before we bought the house... my car payment is only 173.. so even over 3 months.. it won't be over 600 even though it's safe if it is.

We get the 2000 check today and will deposit it.. I"m hoping to be able to file by next Wednesday or Thursday before I get paid on Friday May 13th.

[debee]

Anytime you spend down a lot of cash before filing, you want receipts to show what you spent it on just in case. So your online records will provide that.

You're asked in the SoFA about payments to insiders within the last year. It should be disclosed there. The trustee can ask for records going back even further than a year if he gets suspicious.

Make sure you can exempt your bank balance on filing day or spend down the account the day before you file and spend that money down on necessaries as well. Also be aware of "earned but unpaid" income that the trustee will be entitled to if you can't exempt it. You may want to time your filing around all these things.

[mhp8982]

my attorney said, I can have up to $300 in the account without them taking it. We separated our bank account.. so my husband opened a new account in only his name. His next pay check will be direct deposited in his new account. So only my check will be deposited on Friday May 13th. We had already spent it down below $300 (on bills) because we thought we were filing this week, until we found the mess with that check. But we will deposit the check from my MIL today. And we will go ahead and pay all of our bills online this weekend. My attorney advised going ahead and paying the mortgage and car payment for next month early.. and just paying pretty normal payments. We may pay $200 instead of $100 on my husbands credit card, and things like that.. but we won't do anything like pay $600 on anything or pay anything off.. just small amounts that look normal. I should be able to pay all of these things and have it down by Tuesday next week.. in hopes of filing Wednesday or Thursday, to get it in before I get paid on Friday. Otherwise, I'll have to spend that down as well (after paying all the bills and having nothing for it to go to), and wait even longer. And it's critical to get it in as I have a garnishment hearing on June 15th.. my ex husbands is May 25th. I want it filed before those dates... and working it around pay days and everything is hard. So hopefully we'll be able to do it next week and we'll be fine. Does this sound okay? And will the updated bank printoff be ok? So I won't need actual reciepts? I will take copy of the deposited check that his mother will write to us too.

Is it true that after the day of filing, I can use my bank account like normal?? We intend to use it strictly to pay bills and needs until the discharge is complete.. and pay whatever is left with my husbands new account and use his account for other things that are not needs.

I want to add.. thank you for all of your answers and answering so quick! You have been extremely helpful!! And I appreciate it so much!

[mhp8982]

Another question...

Another reason why I want it filed by next week. I have a doctor appt with an infertility specialist that took months to get into and i'm not wanting to reschedule. I was not wanting to go before I file, Insurance doesn't cover it.. and I don't want to have to file on it. If the appt is a week after filing, is that ok? Anything after the day of filing, even if not discharged, is ok? Is it ok for me to pay them in full for their services after filing, but before 341 meeting and discharge? I guess this goes along with going back to using my bank account like normal after filing day. Will they be watching anything with the bank accounts after the filing date?

[IamOld]

MPH I believe the others will confirm that you can go and use your account after filing to do NORMAL things like paying bills, etc. - re infertility - that's a doctor's visit...period. You can go to the doctor - IRS recognizes it as a deductible expense, therefore, it is a "legit" medical expense.

Heck - I'll be in therapy soon - REALLY - hey, dr's visit!

[mhp8982]

So, they do monitor it after filing? They just can't take anything after the day of filing? We may just pay for those visits out of my husbands new account to be safe since they could be pretty expensive.

[IamOld]

MPH others will comment - but what I have read here, is that depending on where you are, the trustee, etc., they CAN (won't mean they will) ask for a bank statement/printout when you go in...but as I said, others will let you know FAR better than I.

[debee]

Yes, IamOld is right. Whatever you earn after filing is yours to spend however you like. Go back to normal.

At the 341 the trustee might ask for a bank statement that includes the day of filing but they don't always. When they do, it's only because they're looking for your balance on filing day to see if there is any money they can recover for the benefit of your creditors.

I think you need to take a break from all your worrying. It sounds like everything is covered and will work out just fine.

[mhp8982]

OK.. thanks for all of your help! My attorney is having me bring a statement the day we file of the balance that day. I will try to relax a little bit now!