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Am i allow to spend money?

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Anonymous
Not applicable

Am i allow to spend money?

 
Message 1 of 12
11 REPLIES 11
Coffeelover2020
Established Member

Re: Am i allow to spend money?

A trustee may have an issue with this. They may see it as, you have money to buy  $$$ sevice but not make a payment to your creditors. I'd have a friend or family member buy it and pay it back after post discharge. 

Message 2 of 12
Tomew2000
Regular Contributor

Re: Am i allow to spend money?

I've recently had some conversations with lawyers.  Interesting, the only one I asked a similar question seemed to think it'd be ok.  The amount may be an issue, but buying a Christmas present for your kid is normal    Check with your atty 

Message 3 of 12
Anonymous
Not applicable

Re: Am i allow to spend money?

I dont know which state you live but in CA, there is something called wild card exemption that you can use, meaning you can have up to 28k cash in the bank and trustee will not touch it. 

Message 4 of 12
jmw1
Frequent Contributor

Re: Am i allow to spend money?

I would highly discourage the PS5 purchase.  Your son will learn an important lesson about super delayed gratification.

 

You need to file the bankruptcy in good faith which means you are involvent at the time of filing. If you have bank statement transactions from Cancun, the Rolex store, or Gamestop, you don't look broke and may be filing in bad faith. The trustee will not be happy to see that charge from Gamestop. If you had the money to go to Cancun or buy the PS5, why aren't you paying your poor unsecured creditors who have been harmed by you not paying the debts that you owe in full? Expensive game consoles are not needed for your family's survival.  It's also risky to move around your money and have a relative buy the PS5 for you too. If you can't exempt the cash, legitimate uses of cash would be to prepurchase groceries for the following month or replace a vital appliance such as a refrigerator. A PS5 or a vacation or a Rolex watch are not legitimate uses of cash for someone that is truly insolvent.  When the bankruptcy is over, you can go ahead and buy whatever you want.

Message 5 of 12
Anonymous
Not applicable

Re: Am i allow to spend money?

 
Message 6 of 12
pizza1
Community Leader
Super Contributor

Re: Am i allow to spend money?

Ill just keep this simple, and blunt. That Ps5 is considered a luxury item in the eyes of the trustee and the bK courts. If you can pay $400+ with tax included, that could have gone to your creditors, even a small amount.

Just to let you know the trustee will go far back in your bank records, and they will question high dollar withdraws. if you lie and say I bought "groceries" or paid electric bill, they will want to see a receipt.

Depends on how hard nosed the trustee is...mine was brutal. 2 years of bank statements, 4 years of income taxes, and explanations galore of tons of things. I wouldn't chance such a luxury item right before filing. I would promise your son that maybe for his next birthday or Christmas and get him things like shoes, and clothes. Those types of items the trustee can understand....kids grow.

 

A PS5 is a want....not a NEED.  Just my 2 cents.

Message 7 of 12
Anonymous
Not applicable

Re: Am i allow to spend money?

 
Message 8 of 12
jmw1
Frequent Contributor

Re: Am i allow to spend money?

Worst case scenario, the trustee will make you pay the unsecured creditors the amount of the PS5 plus trustee fees as a condition to getting your discharge. The trustee won't come to your apartment and turn off the PS5 and take it away. If the trustee finds the PS5, he may continue fishing for more abusive and bad faith conduct from recent transactions.  Unless asked about luxury purchases, don't tell the trustee anything about the PS5 and hopefully you will get a free pass.

 

I highly advise you to return the PS5 for a refund. Don't play around with this. Seizing the PS5 from your son is not too harsh. Just tell him it's not his fault the PS5 is going bye bye.

Message 9 of 12
Coffeelover2020
Established Member

Re: Am i allow to spend money?

My case for example was very simple and smooth. The trustee asked for all my tax records going back 7 years. And all my bank standbys going back 6 months. My lawyer said they will sort through it all with a fine toothed comb. You have wild card exemptions but those are used for necessary items. The trustee will have you swear under oath at a courthouse when they have your final meeting- that all info provided is in good faith and you made very attempt to pay back your creditors. Like a mentioned prior a 400$ brand new Ps5 is far from necessary need or someone who needs a bankruptcy. It could be questioned and criticized by a trustee and judge. I would have had grandmom buy it and keep it with her til you are discharged. They will view it as you had $400 to buy a brand new luxury game console rather then pay back your creditors. And your creditors may be at your court hearing and my object such an expense rather then pay them. But too late now, you'll have to wait and find out. 


@Anonymous wrote:

Smh, is it too late now? Is purchased already. Also was your case a complex one? Why did they request so much info?



@Anonymous wrote:

Smh, is it too late now? Is purchased already. Also was your case a complex one? Why did they request so much info?


 

Message 10 of 12
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