Cash advance question?

[jari]

Hello everyone,

We just filed on 6-08 for chapter 7 and I have a cash advance question. It never came up in the discussions with our lawyer.

To prevent our checking account from going negative I used cash advance checks in april then paid the amounts back in a day or two all on the same Household finance account. Will this be a problem? I didn't know about the 70 or 90 day rules. I thought since I paid them back it wouldn't be a problem.

advance 3/30 $350 payment 4/3 $342
advance 4/12 $200 payment 4/14 $207
advance 4/18 $500 payment 4/20 $500
advance 4/20 $500 payment 4/22 $500

start of month balance $2900 end of month balance $2950

jari

Will talk to lawyer on Monday.

[aa06a47]

You need to wait until 90 days after your last payment to this creditor. While I see what you were doing, this will be taken as preferential payments. The trustee will more than likely try and collect money from this creditor. If your last payment was 4/22, you should wait until 7/22 to file. Then, it will not be brought up.

[aa06a47]

Another thing, even though you paid the cash advance amount, the creditor applies your payment to the oldest money borrowed. Your creditor may still cry foul. They will really cry foul if they get duked into paying anything back you paid them over 600 bucks.

[jari]

aa06a47

Thank you for the info.
That sucks, We already filed on 6/8.
Hope things don't happen that way.

jari

[aa06a47]

Did you put down you paid any creditors over $600 on your schedule? If not, you might not hear anything about it unless the trustee notices the payment from your bank accounts.

If the trustee ask, you can tell the truth. I really don't see your creditors filing much of a complaint because if they did, your attorney can just metion the fact to them that you will go ahead and amend the schedules to show the payments over 600. That might shut them up...who knows. Get some advice from your attorney before the 341 meeting..