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    Help me understand bank account seizure

    So I have one savings account with nothing in it except the tax money I will have to pay before the bankruptcy. I have one checking and things are autodrafted from it like my car insurance and my pets healthcare plan, which is a contract and I can't just stop either of these things and "pay another way." My adjusted gross income is like 30k. From what I've been reading on chapter 7, even if they allow these as living expenses, if the money is sitting in the bank account, they will take it anyway. I' that true? Does this mean I'm SOL with anything that requires an audodraft? What do I do?
    Last edited by stormygate; 02-18-2018, 06:44 AM.

    #2
    There is no seizure of your bank account. When you file your petition you must list all property which includes cash in banks. You then use an exemption in order to protect some or all of the cash that you have (as well as other property). Depending on many factors, including your State, and whether your State allows the use of the Federal exemptions, you may be able to exempt the cash on hand. If you are paying secured or priority debt (priority debt is current taxes), then there is nothing that you need to do. If your bank account is $0, then it's simply $0.

    Why not just pay your current payments two days before you file? Otherwise, that money, on hand, "may" be subject to turnover to the Trustee, but again, you really need to understand exemptions and whether you have enough exemptions to cover the relatively small amount of money.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

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      #3
      The bad thing is that some things are autodrafted from my account like my car insurance. I don't have a way to change that, it's part of my policy with them. My pets are on a insurance plan more or less that's under contract that's also autodrafted. I have a few others as well.

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        #4
        Call them up and change them. I need to pay using a different method for a few months.

        The outfit might charge you a few more dollars a month for a few months, until you have a new account to use for autopay. Or give them the new account that has only their payment amount in it plus $5 to keep the account open.

        Most businesses would rather be flexible with payment methods than have to find a new customer.

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          #5
          Originally posted by Maria80386 View Post
          Call them up and change them. I need to pay using a different method for a few months.

          The outfit might charge you a few more dollars a month for a few months, until you have a new account to use for autopay. Or give them the new account that has only their payment amount in it plus $5 to keep the account open.

          Most businesses would rather be flexible with payment methods than have to find a new customer.
          Typically I would agree...I may be able to work that out with the insurance company. At least through my broker it would probably be allowed to pay them by check and then they mark that billing cycle paid with the insurance. The others such as the pet stuff they unfortunately don't have another way That's how their system works. What I COULD do is get a prepaid debit card if I could find a reloadable one I guess and change to that. That's not a bad idea. Same thing with hulu. I pay for hulu as my "rent" here until after the divorce and then I'll have to do something more substantial. Hulu lets you buy prepaid cards for subscriptions.

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            #6
            Do all of the autodrafts happen near the same time? If so, time your bankruptcy filing so that you file after the payments have been made, but before your next paycheck. If not, perhaps you can get the payees to change the payment dates.

            Your profile says that you live in Michigan. Do you own a home with equity? If not, and maybe even if so depending on how much equity you have, you might want to use Federal Exemptions which allow a wildcard of $11,850 if you don't need it for a homestead. You could use that to exempt cash. You can compare the Michigan and Federal Exemptions at https://www.legalconsumer.com/bankru...hp?ST=MI#other
            LadyInTheRed is in the black!
            Filed Chap 13 April 2010. Discharged May 2015.
            $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

            Comment


              #7
              Originally posted by LadyInTheRed View Post
              Do all of the autodrafts happen near the same time? If so, time your bankruptcy filing so that you file after the payments have been made, but before your next paycheck. If not, perhaps you can get the payees to change the payment dates.

              Your profile says that you live in Michigan. Do you own a home with equity? If not, and maybe even if so depending on how much equity you have, you might want to use Federal Exemptions which allow a wildcard of $11,850 if you don't need it for a homestead. You could use that to exempt cash. You can compare the Michigan and Federal Exemptions at https://www.legalconsumer.com/bankru...hp?ST=MI#other
              Unfortunately they all happen about 2 weeks apart, but I will definitely look into some of these options we've brainstormed.

              I have a Mobile Home we bought in March 2017 for $20k. There's practically no equity in it and it has a mortgage. I'm letting my husband have it in the divorce. I can't afford to stay there alone and we'd probably be upside down on it if we had to sell so soon because they don't appreciate. They might actually force the sale anyway because he can't refinance.

              I've been wondering about the federal exemptions. This is a great resource, thanks! I don't have anything that's going to be of value to them really. My wedding ring values at like $300 in looking at resale value of comparable rings. My car is worth less than I owe on it, but I'm going to ask to reaffirm because I don't have the money to replace it and I need it to work. I have 2.5 years left on payments. They might not let me though because I have an unsecured loan through the same CU. There's no public transport from where I'm living now. I'd have to walk about 5 miles if not more to get to a bus stop. Would seem silly not to let me though because they'd otherwise lose money on it. I'd rather keep a car I know what's been repaired and what needs work than a craigslist mystery. That's the other thing, I have a work order from November showing other things that need repairs that I couldn't do after sinking in $3,000. They're not going to want to deal with all that.

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                #8
                What's this with the federal wage garnishment exemptions: none
                Does that mean that once you file, they get to keep all your wages until the discharge?

                Comment


                  #9
                  Originally posted by stormygate View Post
                  So I have one savings account with nothing in it except the tax money I will have to pay before the bankruptcy. I have one checking and things are autodrafted from it like my car insurance and my pets healthcare plan, which is a contract and I can't just stop either of these things and "pay another way." My adjusted gross income is like 30k. From what I've been reading on chapter 7, even if they allow these as living expenses, if the money is sitting in the bank account, they will take it anyway. I' that true? Does this mean I'm SOL with anything that requires an audodraft? What do I do?
                  There will never be any freezing of the bank account unless you have specifically ordered to do so. In case they have done so, you can file a complaint. This is because the freezing of accounts normally happens when there is unusual activity that is being noticed. Additionally, the bank account may be linked to other accounts as well as source of funds. For example, the bank account may be linked to other accounts like online demat account and trading account. Thus for these reasons, it could be stagnant or appear inactive.

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