Do Healthy Savings Affect Your Ability to File Bankruptcy?
What Happens To My Bank Account Money If I File For Bankruptcy In Arizona?
Chances are good that you don’t have much savings if you are considering filing for bankruptcy. You have likely been overwhelmed by debt for so long that all of your free money has been going to paying off your creditors. However, you may have a little bit of money in the bank, and you may be worried that if you do file for bankruptcy, what little you have will be taken.
Rather than give up on bankruptcy and turn your back on the debt relief that it offers, it is important that you talk to a bankruptcy lawyer in Tucson about your exact financial circumstances. Your Tucson bankruptcy attorney will help you understand how things like bank accounts, tax refunds, and more are treated under bankruptcy, and will give you advice about how to get the debt relief you need while also protecting certain assets where you can.
Bank Accounts at the Time You File for Bankruptcy
In Arizona, you can have up to $300 in your bank account at the time you file for bankruptcy. If you have more than that in your account, it will be considered disposable income for the purposes of paying your creditors. The court can take the excess amount and use it to satisfy your debts.
But no need to worry! The court only looks at the balance in your bank account on the day that you file for bankruptcy in Tucson. Therefore, you can plan to file on a day that you know your bank account will be low, such as right after you have paid your rent and all your other bills for the month.
What if Your Bank Account Won’t Ever Be That Low?
Unfortunately, you can’t just take money out of your account to make it artificially low. You can’t just pull the money out of your account and stash it somewhere else. That would be considered fraud, and if you were caught, you would face serious penalties. You could be fined or even jailed for it. So, in an attempt to save yourself some money, you would have to spend a lot more money and might even have a criminal record.
How to Handle the Extra Money in the Account
The best thing you can do with the extra money in your account is to spend it. But don’t run out and buy a new pair of Louboutin’s. If you are spending the money on anything frivolous or indulgent, that can also result in consequences with the bankruptcy court, including having your case thrown out.
Instead, spend the money on allowable things, such as housing or car repairs, food, medical care, and rent and utilities. Just make sure you check in with your Tucson bankruptcy attorney about how you plan to spend the money and whether those expenses will be allowed. You don’t want to spend it and then find out later that it wasn’t allowable, and now you have serious trouble on your hands.
When you do spend the money, make sure you save your receipts and any other documentation, such as a repair bill for your car, to prove that you spent the money on what was allowed. The bankruptcy court will be analyzing your account statement, and it will question any expenses it sees. You need to be prepared to explain them. The absence of explanation or documentation will not be enough to help you avoid trouble.
Filing for bankruptcy can offer debt relief in a way that other options cannot. If you are struggling with debt, talk to a Tucson bankruptcy attorney about how bankruptcy can help you. Don’t let things like your bank account or a house stop you. There may be options for saving those things while also getting the debt relief you need.
Call An Experienced Bankruptcy Attorney In Tucson, AZ
Call My AZ Lawyers today to talk to one of our experienced bankruptcy attorneys about your options through bankruptcy. You could get all of your unsecured debts like credit cards completely discharged, or you could get your debts restructured under a payment plan that you can actually afford. We’ll help you understand your options through both Chapter 7 bankruptcy and Chapter 13 bankruptcy and help you understand which would offer you the most benefits. Call us today to schedule a free consultation and learn more.