Filing in month with 3 paydays

[danaf]

I'm going to be filing in a month with 3 paydays (happens 2x a yr). So things are looking a bit skewed & now I'm scrambling because I'll have too much extra $$$$ even after paying my bills.
My exemptions won't cover it all plus the tax rebate coming up.

So I figure I'll pay off my car insurance for rest of year & make a payment or two against the principal of my car.

If I pay off my car insurance, can I still include it in my monthly budget?

I believe I read in the bk book that the trustee estate is everything in your estate on the day & before you file. I just don't want to feel like I'm hiding my paycheck $$$ when I go to the 341.

And also - people say that you shouldn't have more than 100 in the bank on the day you file. Can I ask why? Even if the $$$ is from your paycheck, slotted to pay bills, and I can exempt it?

[lrprn]

I'm going to be filing in a month with 3 paydays (happens 2x a yr). So things are looking a bit skewed & now I'm scrambling because I'll have too much extra $$$$ even after paying my bills. My exemptions won't cover it all plus the tax rebate coming up.

Can you file before the end of April? Our lawyer told us when we filed Ch 13 to definitely avoid filing in a three-paycheck month if at all possible just for the reason you've discovered.

So I figure I'll pay off my car insurance for rest of year & make a payment or two against the principal of my car.

Check with your insurance and your auto lender first to see if it's possible to do this. Also it's possible that your trustee may see extra car payments as preferential. This is one of those times that filing pro se leaves you without someone knowledgeable about the practices in your local court to ask about stuff like this.

If I pay off my car insurance, can I still include it in my monthly budget?

If you've paid it off for the rest of the year before you file, then technically no. It's up to you to decide if you want to risk including the monthly payment when you have no monthly payment to make for eight more months.

And also - people say that you shouldn't have more than 100 in the bank on the day you file. Can I ask why?

Because in most states it's hard to protect cash along with all the other things that need protecting with your exemptions. Also if you've got thousands of dollars sitting in an account, then why aren't you paying your creditors with it? Last reason - it's easy for trustees to take cash. It's much harder to liquidate an asset to get cash.

Even if the $$$ is from your paycheck, slotted to pay bills, and I can exempt it?

I'm sorry to say that there have been rare cases when a trustee has taken cash out of accounts when checks had already been sent to pay a mortgage or a car payment but hadn't cleared the account yet. In those cases, the trustee said "tough nuts - your problem". To avoid this, make payments early (or even better, electronically through your bank online bill paying if that's available) to make certain the payments clear your account before filing.

Unless there's some very good reason, try to file before April 30 to avoid the "too much cash/too much income" problem. The other option is to wait one more month and file after May 31. Are either possibilities for you?

[danaf]

Well - I had a good reason waiting until May otherwise I would have already filed.

My rebate check is slotted to deposit into my account on
May 16. This is a checking account at the CU where I have my car loan. Even though I plan on keeping my car and am up to date with payments, I don't want to take any chances with the CU taking that money (cross collatorerization ect). And there is no way into changing where the IRS will send those rebates. That's where my tax refund was direct deposited and that's where the rebate will go.

So, I figured I'd file on the 15th, then go to the CU next day and take out that cash rebate (which I'd be exempting). And also that day is my second paycheck of the month which would not be part of the estate at that point because I would have filed the day before.

I can pay my car insurance for the yr (I checked) and make one extra payment toward the principal of my car. And I don't think the trustee would go after 1 car payment but if he did, it's not a huge amount. Minus a few other expenses, and then I can exempt whats left over as well.

I checked my budget and I'm under by a couple of hundred so excluding my insurance payment won't hurt me.

And I'd really prefer not to wait beyond May. Because then the extra money will just diddle away not going towards anything useful. Or even if I saved it, I'd be over my exemption limit on cash on hand (which for NY is only $2500). I'm really tired of being in a holding pattern. I want to be able to take any extra money that comes my way and start paying down my student loans ect. Right now, I can't do any of that due to preferential payments.

[CindyLou]

Well, it can just never be simple, can it?