Cash in Banks

[Boscoe]

I have been reading many of these posts and doing other research, and I am confused about what to leave in bank accounts on filing date.

If filing a chapter 13, you get to keep control of all your non-exempt assets, so why do anything different with the cash in banks? It is part of the bk estate, but still yours, right?

[HHM]

Correct, in a chapter 13, you don't need to do anything. But in a chapter 7, if there is no ready exemption for cash on hand, you want to make sure your bank account has a minimal amount of chase, less than $300.

[bige1030]

In a Chapter 13, your creditors must do at least as well as they would have in a Chapter 7 (i.e. receive at least the value of your nonexempt assets over the life of the plan). What that means is that you might still want to draw down your bank accounts so that you have less nonexempt assets.

I originally filed under 13 (but converted to 7 later), and my attorney told me to draw down my bank accounts.

[lrprn]

I originally filed under 13 (but converted to 7 later), and my attorney told me to draw down my bank accounts.

Our Ch 13 attorney also recommended that we have as little as possible in our checking account on filing day, and we followed that advice (had $126 on filing day). Our savings account was LONG gone - didn't have to worry about that!

As I recall, our lawyer's rationale for having as little in our accounts on filing day as possible was that if there's any doubt you are filing in good faith, having a lot of money in your accounts helps prove the trustee's position you could be filing in bad faith..."Why haven't you used that money to pay your creditors?"