What Happens to the Money I have in the Bank and Provisions When Filing Bankruptcy?

What Happens to the Money I have in the Bank and Provisions When Filing Bankruptcy

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This topic is a touchy one at best. Ultimately you need to check with an attorney in your state for the official answer but I am going to offer some general insight and experienced opinion on the matter.

When going into bankruptcy you are usually going to lose all of the money in your personal bank account outside of $150 or less. This is a real heart breaker and for that I would not recommend keeping the money in the bank. Get it out of there. Things will be hard enough without having your funds taken. You'll need to see an attorney but my advice is to not let it sit. Spend it, protect it, or put it to use but do not let it sit in the account for the taking. Cash your paychecks and put the funds to good use.

On top of that food and provisions are exempt but only for a 6 month supply. So in theory if you have one year's worth of food storage half of it can be taken. So in all reality they can take your provisions depending on the type of bankruptcy you file. If you don't have much in food or provisions this would perhaps be a good place to invest some of your funds.

If you are going to do anything make sure that you do it before filing the bankruptcy and above all else before taking any advice here make sure you see an attorney for the final say on the matter.

With that make sure you know that just because a bankruptcy gives certain powers such as the right to take or acquire property that it doesn't mean that they will. For example, they will probably be more interested in taking a paid off car or home before a $1,000 in petty cash.

If you scour your local phone book you will find a multitude of lawyers that offer free consultations. You should be sure to see a minimum of three. There you can get your questions answered and make sure you qualify.

The reason I say three is that you may not like the first or second lawyer. These people sometimes can be somewhat cold and impersonal. I recommend looking for one that really strikes a chord with you personally as you will be spending some quantity time with them.

For more information and tips to know check out this guide to filing bankruptcy or this overview on chapter 13 bankruptcy rules. You may find yourself falling into another chapter.

In which case be sure to check out this brief guide to help you get your other questions answered on chapter 7 bankruptcy information.

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