When/for how long, do I have to have as little cash as possible?

[shoopy]

Since I will have no exemptions for cash, my attorney has said that I will need to have as little cash as possible in bank accounts, etc.

When does this "snapshot" of no cash get taken? Right before the 341 meeting,or another time? How long does the cashless state need to continue.

I would have thought that if an account contained only proceeds from my SS disability payments, it would be exempt, but my attny said that he would rather deal with no cash on hand than try to exempt my SS funds. I didn't ask why.

[AngelinaCat]

It is the day you file. No more, and no less.

[btbeme]

Filing day is the snapshot that counts.

Now, if you were to deposit a couple thou in cash a week after filing and the Trustee takes an interest in your account statement, I'd expect a few pointed questions at the 341. Similarly, if you file the day before a payday, you could be putting a portion of that paycheck at risk (earned but not yet paid counts as an asset). The simple way to avoid scrutiny and uncomfortable questions is to just let normal deposits and deductions occur as they normally do.

From a timing perspective, I understand that filing shortly after a payday (after paying bills with that paycheck) is the most desirable.

[justbroke]

Nothing more that I can add to the excellent advice already provided, except the following. Even though btheme touched on this, it's important to understand. Don't try to play games with hiding money. If it looks fishy to the Trustee, as btheme's example illustrates, the Trustee will want to probe further.

If you have "thousands" to spend-down, make sure you work with your attorney on the proper way to spend-down the money. As already stated, thousands disappearing from your account just weeks before filing, will probably cause the Trustee's curiosity to be peaked, and they may want more detail on how you spent your money.

If your account is ONLY SS proceeds and you can prove that only SS/SSI benefits were paid into that account and there was not one PENNY of co-mingling, then it's not an issue. What your attorney does not want is that you did put other money into that account and now the "source" of the funds in that account are now questionable.

I would STILL have my attorney exempt my "SS only" account exempt on Schedule C using the appropriate Federal or State exemptions! Even if only $0.10 is in the account.

[lvmcse]

Nothing more that I can add to the excellent advice already provided, except the following. Even though btheme touched on this, it's important to understand. Don't try to play games with hiding money. If it looks fishy to the Trustee, as btheme's example illustrates, the Trustee will want to probe further.

If you have "thousands" to spend-down, make sure you work with your attorney on the proper way to spend-down the money. As already stated, thousands disappearing from your account just weeks before filing, will probably cause the Trustee's curiosity to be peaked, and they may want more detail on how you spent your money.

If your account is ONLY SS proceeds and you can prove that only SS/SSI benefits were paid into that account and there was not one PENNY of co-mingling, then it's not an issue. What your attorney does not want is that you did put other money into that account and now the "source" of the funds in that account are now questionable.

I would STILL have my attorney exempt my "SS only" account exempt on Schedule C using the appropriate Federal or State exemptions! Even if only $0.10 is in the account.

What happens if you had lets say $60,000 in your bank account years ago. Would the trustee ask where you spent the money on if you filed BK today??

[shoopy]

Nope, no thousands to hide. When my wife's check is deposited, the same week my SS check comes, there can be more than a couple of thousand between a couple of accounts, but it is all for expenses. I understand that the money can be legally disbursed quickly, but wasn't sure if there were "snapshots" at different times, or only once. I will definitely fine tune it with my attorney when the time comes.

I don't want to give up any more than I have to, but certainly would not try to conceal any assets, even if I had assets worth concealing.

[justbroke]

What happens if you had lets say $60,000 in your bank account years ago. Would the trustee ask where you spent the money on if you filed BK today??

If it was a year of more ago, they generally don't care. If there was $60K within 90-days, they would certainly like to know.

My Chapter 7 Trustee didn't ask for any bank statements, but I was a Chapter 13 converted to a Chapter 7 so nothing would have been property of the Chapter 7 bankruptcy estate. I believe that, in my District, the Trustee typically asks for 3 months of bank statements. I provided 3-months to the Chapter 13 Trustee. I was an over-the-median income filer at the time. (My Chapter 7 case was a non-consumer case.)

What Trustees are really looking for are assets, "eve of bankruptcy" shenanigans, (avoidable) transfers, and fraudulent conveyances. There are people who will do bankruptcy "pre-planning" to the extreme and take that $60K and have a "friend" (or family member) hold it until after the bankruptcy. Honest people really need not worry if they didn't try to "hide" (hinder or delay) creditors or the Trustee.

[memama]

Shoopy,
You definitely don't want to hide assets, and I do believe that your attorney would probably tell you if you just have too much money in your account if you tried to file. Therefore, I don't think you have to worry *at all* about losing more than you have to My husband and I tried to file and the attorney felt uncomfortable with the amount we had in our checking accounts. We didn't care; we had spent our money ethically and legally and didn't have anything else to spend the money on! Nonetheless, he told us to wait to file, got a second opinion from a fellow attorney, and sent us on our way. He preferred to see no more than $150 in bank accounts as of the day of filing, but we had around $500 and had no trouble with the trustee asking questions.

[lvmcse]

If it was a year of more ago, they generally don't care. If there was $60K within 90-days, they would certainly like to know.

My Chapter 7 Trustee didn't ask for any bank statements, but I was a Chapter 13 converted to a Chapter 7 so nothing would have been property of the Chapter 7 bankruptcy estate. I believe that, in my District, the Trustee typically asks for 3 months of bank statements. I provided 3-months to the Chapter 13 Trustee. I was an over-the-median income filer at the time. (My Chapter 7 case was a non-consumer case.)

What Trustees are really looking for are assets, "eve of bankruptcy" shenanigans, (avoidable) transfers, and fraudulent conveyances. There are people who will do bankruptcy "pre-planning" to the extreme and take that $60K and have a "friend" (or family member) hold it until after the bankruptcy. Honest people really need not worry if they didn't try to "hide" (hinder or delay) creditors or the Trustee.

The reason I ask that I because I have friends that made a ton of money in real estate transactions. I use to hear him and her bragged that they had 100,000 of cash in their checking account. Like everyone else that owned property during the years of 2006-2011 they took a BIG HIT! These people had multiple properties! Present time, friends are not involved in real estate anymore, lost all properties, have credit card debt, 1099 debt and have about $500.00 in cash.

[tobee43]

the day we filed we had over 3k in our bank account. after all our bills are paid we are minus by the end of the month.

i made certain for two years prior to filing everything was done solely via our bank account so it was easy to track an in and out basis of income v expenses. it made the trustee's job much easier and nothing to hide, it's right up front for all to see.

we supplied 2 years of bank statements as i'm certain the trustee was looking for consistency. i know it's usually 6 months, but our income was quite high at the time of filing in this state as we were collecting UI from another state which was considered quite high for this state we now live in...consistency, again, which is the KEY here. since at the first of the month which was about the time of our 341, we have our SS and pension checks auto deposited into our accounts. (our county allowed for two an income of 52K, which we thought rather high at the time to file a 7, but was correct), but the trustee could simply pick up our bank statement to see how the monthly disbursements were month after month after month. also the fact that our SS and since it was state police pension, but those incomes were exempt...OH...and why our income was also so high at the time was unemployment insurance which in our county was also exempt, although, the very next county over it was not. (so odd, but true).

[ksgirl38]

I was told the best time to file is right BEFORE your payday, not after. That's usually when your bank account is going to be lowest and if you have trouble spending cash you can always try pre-paying a few bills. I paid my renters insurance policy off and paid forward a month on my cable and car insurance bills.

[tobee43]

I was told the best time to file is right BEFORE your payday, not after. That's usually when your bank account is going to be lowest and if you have trouble spending cash you can always try pre-paying a few bills. I paid my renters insurance policy off and paid forward a month on my cable and car insurance bills.

you can only go to your 341 when it is scheduled not when you want to. you may file on a certain date but you have to wait until the calendar opens up for your 341 and that is the day you are asked about your money, or at least that is the day i know the trustee looked at our petition under a watchful eye. i know with us, we were told it would be no more than 4 weeks from our filing date, yet, ended up more like 7 weeks and it was at the first of the month when all our checks come in. we had no control over that, no one does.

i also know that our petition was reviewed weeks before our 341 by our trustee's paralegal since she contacted me via my atty on at least 5 different matters prior to our 341. i think the least of what they cared about was calling into my bank account to see what my balance was that day. just saying...it's really not that big of a deal.

[ksgirl38]

you can only go to your 341 when it is scheduled not when you want to. you may file on a certain date but you have to wait until the calendar opens up for your 341 and that is the day you are asked about your money, or at least that is the day i know the trustee looked at our petition under a watchful eye. i know with us, we were told it would be no more than 4 weeks from our filing date, yet, ended up more like 7 weeks and it was at the first of the month when all our checks come in. we had no control over that, no one does.

i also know that our petition was reviewed weeks before our 341 by our trustee's paralegal since she contacted me via my atty on at least 5 different matters prior to our 341. i think the least of what they cared about was calling into my bank account to see what my balance was that day. just saying...it's really not that big of a deal.

That's not the way it works here. The day you file the paperwork is the day they want to see what your account balance is. I was just asked to provide a bank statement showing my balance the date of filing last week and I haven't been to my 341 yet.

[LadyInTheRed]

When my wife's check is deposited, the same week my SS check comes, there can be more than a couple of thousand between a couple of accounts, but it is all for expenses.

Before you file, you may want to open a separate account to have your SS check deposited into. Do not deposit any other funds in the account. That way, it is easy to prove that all of the cash in that account is exempt SS funds on the date of filng. Assuming SS funds are exempt (which I believe is the case but haven't researched myself recently), if your attorney is worried about having cash in an account that has no deposits other than SS funds, I'd get a new attorney.

I was told the best time to file is right BEFORE your payday, not after. That's usually when your bank account is going to be lowest and if you have trouble spending cash you can always try pre-paying a few bills. I paid my renters insurance policy off and paid forward a month on my cable and car insurance bills.

Whether that will work depends on whether you can exempt earned but unpaid wages in your state. If you file the day before payday, and then receive a $3,000 pay check the next day, but don't have exemptions available to cover $3,000 in earned but unpaid wages, the trustee can take that cash. Already spent it on necessary living expenses? Too bad, you're gong to need to find away to pay the non-exempt portion to the trustee. If instead, you collect your $3,000 paycheck, pay your mortgage/rent and other bills, let all of the payments clear your account and then file when your cash balance is $200 and you have only worked a couple of days for which you have't been paid, you have a lot less to exempt.

One solution will not fit all situations. That's why it is important that everyone planning to file bankruptcy discuss this kind of timing issue with their attorney.

That's not the way it works here. The day you file the paperwork is the day they want to see what your account balance is. I was just asked to provide a bank statement showing my balance the date of filing last week and I haven't been to my 341 yet.

The bolded statement is absolutely correct. As already pointed out a couple of times in the thread, the filing dates is the only relevant date for determining whether you have non-exempt cash. The trustee may still want to look at later bank statements to make sure sure the deposits are consistent with reported income and that there weren't suspicous transactions after the filing date that could be evidence that cash was being hidden. The cash balance on the date of your 341 is really irrelevant.

[tobee43]

well, some people are just not in kanas anymore! LOL!