More ?'s for Ladynred :)

What is the name of your state? AZ

A friend of mine who filed BK last year was showing me her paperwork and I had a couple of questions.

First of all, it states that "The Trustee is entitled to receive up to 25% of pay owed to you as of the filing date." Could you explain what all this means? (My friend says they did not take any money from her.)

Also, I'm confused about the bank balances thing. It states that "The Trustee can take money above $150 ($300 for couples) in your exempt bank account. The Trustee will ask for bank statements showing the money in your account before and after the filing date." My question here, is, how much BEFORE the filing date will they want to see bank statements? I don't have anything to hide, but my husband got paid this week and deposited his check to pay the mortgage and some other bills. Will we be okay, since we aren't going to file until Feb.??

Thanks again for your help. Some of this BK stuff is confusing.

[Ladynred]

1 - The statement about the Trustee taking 25% of earned wages is in line with the state and federal laws, its a garnishment of sorts, but I've not heard on these boards where a Trustee has taken advantage of this. It says they CAN, doesn't mean they WILL.

2 - From what I've seen here, the Trustees go back at least 60 days, and even 90. More than that is unusual, but I've seen where some people were asked to produce a year's worth. I think a lot of that has to do with suspision of fraud. If the Trustee thinks your paperwork looks suspicious, they can ask for a lot of papers.

Your husbands paycheck deposit should be fine, as it will also show the payout for your mortgage and other 'normal' bills.

If, by chance, the Trustee did take 25% of the wages, how long would that last?? Would it be a one time thing or last for months?

I'm a little frightened by that.


What exactly are they looking for when they check bank statements? Are they looking for which credit card bills you have paid, money deposited, money spent for "fun" stuff, etc.?


Thanks, again.

[Ladynred]

I don't really know how long the Trustee could take funds from your account, but I would *think* it would be a one-time thing. As I said, I've YET to see one person here (or other boards I frequent) who's had this happen.

As for the bank statemetns, they're looking for spending patterns I believe. You can SAY your utilities and house payment are $xxx, but a bank statement would confirm it for sure. Same for other expenses that you list. Granted, not everything you pay for shows on your bank statement, particularly if you withdraw cash and use cash for things. That's why I've seen it recommended that you keep ALL receipts for 30 days prior to your filing.