Account Balance at Filing/Best Buy

[had6010]

What is the name of your state? OH

I have two questions I am trying to find answers to. First, I will be filing BK Chap 7 mid-March. I have read several comments from individuals indicating that it matters what my bank account has in it the day I file. Is this true? Should I try to drain my account (by paying my bills that I need to pay anyway) right before I file so the balance is as low as possible? I live paycheck to paycheck (or not even) but sometimes I let money sit in my checking account for a week or so until a bill is due. Does it matter what the balance of my account is the day I file?

My second question is related to a Best Buy card. I purchased $700 worth of stereo items (receiver, cable, speakers) on my Best Buy card in November because they were having a great sale. I fully intended on using my tax return to pay this off but then after a month or so I realized I was only kidding myself about bills and talked to a lawyer about filing BK. In another thread someone mentioned Best Buy's card agreement allows them to take the merchandise back. Is this true? I have about $1100 on the card right now...if they want the items back can my lawyer negotiate to pay this off over a period of time?

Thanks!

 

[Gomer_P]

I hope to get some light shed on this situation also but it seems like there are only a couple people on this forum that give info and about 500 that request it, lol. I feel sorry for them since they are few and far between and have so many questions to answer.

EDIT: Doing this helped me somewhat. I used the search feature and typed in "security interest" and got a lot of info from that. I came to the conclusion that Best Buy, Circuit City, etc. can't get the property back unless they file something called Replevin but that will probably cost them way more than the merchandise is worth. Hope this helps,
Gomer

 

[AttorneyOney]

There are two reasons for possibly draining a bank account just before filing. First, if one owes the bank money (say, on an auto loan), the bank may freeze the account until its set-off rights are determined during the bankruptcy. Second, the exemption laws in some states treat bank accounts and other assets differently. So, if cash in hand would be exempt but the same amount in a bank account would not be, it obviously makes sense to cash out the account. The converse could just as easily be true, though: it pays to consult a bankruptcy attorney before taking any "exemption planning" steps in advance of filing, lest you find yourself lamenting about a Revolting Development.

 

[Gomer_P]

What is the name of your state?

I purchased $700 worth of stereo items (receiver, cable, speakers) on my Best Buy card in November because they were having a great sale.
Thanks!

I guess they are having a better sale than they thought they were, lol.

 

[Ladynred]

Yes, its true that Best Buy can ask you to reaffirm and if you don't they can ask for the items back. Since your items are new, they're more likely to be a bit more insistent that you give it back. How far they'll actually go is unknown. The price tag you PAID of $1100 is far more than what they COST BB, and they can't re-sell the stuff. Its also possible they could object to the discharge of the debt since the purchase was so recent.

 

[had6010]

$400 of the purchases were made months before the $700 of stereo equipment. I am not filing until mid-March so by then it will have been almost 4 months. Hopefully, they won't bother since like you said, they can't resell it and it didn't cost them nearly as much. I spoke to my lawyer and he basically said not to worry about it...he said we should be able to negotiate with them and if not, I may have to reaffirm the debt. He said more than likely I won't have to give back the property. I guess I will wait until I file and see how it goes...

 

[GaAtty]

GAAtty

It will not matter what you have in your bank account on the day you file unless it is significant in proportion to your debt. In other words, if you owe $15000 in bills, file bankruptcy to get out of the bills, and have $500,000 in your bank account, you probably will not get approved for bankruptcy. The trustee will not let you get out of paying people when you obviously have the money to do so, it is considered an abuse of the system. However, if you have $15000 in bills, it doesn't matter if you have $100 in your account when you file, or $2000, you still can't pay what you owe. Do not try to change your financial situation right before filing, because the application will ask about any assets that you have given away, accounts closed or opened, more than $600 paid to any one creditor within a certain time, etc. It is not a good idea to try to hide these things, remember the bankruptcy court can always get your bank records. Trying to cover up or lie about such things is considered bankruptcy fraud, which is a federal crime investigated by the FBI. Presumably you already have enough things going on without that.

Remember that the moment you file bankruptcy there is an automatic stay that prevents creditors (which includes Best Buy) from taking any action at all against you, and that includes repossession. Any further actions Best Buy takes about the things you purchased will be done through the bankruptcy court.

If you have other secured debt, such as car, etc., that you want to keep, you may want to consider a Ch. 13 instead of Ch. 7.