Oh sure he’s! And even worse, the chapter trustee can take any cash you’ve got in hand or on deposit on the day we file.

On the day we file chapter, you don’t need to have a lot in the way in which of liquid belongings (like money or cash on deposit on a checking account). In principle, the trustee can take the cash you had on the day you filed and use it to pay collectors. This implies Venmo as effectively!

For example, let’s say you file a chapter 7 chapter immediately and have $1,500 in your checking account on the date of submitting. Tomorrow, you spend that $1,500 in your month-to-month hire. One month later, if you meet with the bk trustee, he’ll ask you to show over that $1,500 in order that he can use it to separate between your collectors. If you attempt to clarify that you simply spent the cash on hire after submitting, he received’t care. You had it on the day of submitting, and he needs it now.

On the day you file chapter, your chapter property is created. All the pieces you personal on that day is a part of your property. Mainly, the chapter paperwork takes a snapshot of your belongings for that day. (If you happen to obtain your paycheck the following day, that’s okay. You didn’t have these funds on the day you filed). The trustee goes by your property, takes issues that may’t be protected (just like the $1,500) and makes use of them to pay collectors.

On the day you filed, you had the cash, and he needs it. It wasn’t your cash to spend. It was (and is) his. If you happen to can not flip over these funds, the trustee could make your case pretty terrible. In excessive circumstances, he may even throw out your case and deny you a discharge of your money owed.

One month after we file, the bk trustee will ask for a duplicate of your financial institution statements going again anyplace from 1-3 months earlier than you filed. This exhibits all your transactions and funds. This exhibits clearly if you paid your mother again or if you transferred cash to your Venmo account to cover it from the trustee.

Sadly, the trustee has been doing this for much longer than you, and he has seen nearly each trick folks use to cover cash. He’ll ask for transaction stories or statements from not solely your financial institution accounts, however your quasi-financial accounts like Venmo, Cashapp, Paypal, and any others that you can imagine. If you happen to had cash in these accounts (or unusual transactions), it may trigger a world of damage for you and your case.

The most secure strategy to deal with it’s to reveal all the things actually. If in case you have a little bit extra cash proper earlier than submitting chapter (which is uncommon), go construct up your meals storage. It’s laborious to punish somebody for stocking up their meals storage to climate a storm.