An experienced Denver bankruptcy attorney can make sure your bank accounts are protected.
One of the reasons that you should hire an attorney when you file bankruptcy is that an experienced lawyer can guide you through the process safely. One of the trademarks of a good attorney is her ability to explain the process to you in a way that you understand and her willingness to answer any questions you have.
Unfortunately, sometimes I can fall short of thoroughly explaining things to my client. During the intake process with a new client, we talk about the timing of filing their petition. Timing can be crucial for some of my clients, so it is a big element in preparing for filing. One reason is that the bankruptcy trustee in Colorado can force a filer to turn over any wages he has earned but not been paid for on the day his petition is filed. Another factor relating to timing is that the bankruptcy trustee in Colorado can force a filer to turn over any money that he has on hand the day his petition is filed, whether it is in his bank account, his mattress, or his wallet. Keep in mind that in the case of wages, in Colorado the trustee can only force you to turn over 25% of your take home pay, whether it has been earned but unpaid or deposited in your bank account. If the money in your bank account is from another source, the trustee may be able to take more of it.
I had thought this was a thorough explanation of potential issues related to timing until last week during an appointment with a client. Her petition was ready to file. I had actually gone to her office so she could sign the petition. At the moment she was without a car and using the bus system. It was going to big a much bigger hassle for her to catch a bus to my office than for me to drive to hers. After she signed the petition, she asked, “So when is the trustee going to take money out of my account?”
I’ll admit that I was surprised by the question, but I realized it was my fault for not explaining things well enough.
While the bankruptcy trustee can force you to turn over money that is in your bank account on the day you file or any earned but unpaid wages, she won’t have access to your bank account to take that money. And you also won’t have to pay that money on the day you file. Typically, you won’t find out whether you’ll have to pay anything to the trustee until your meeting of creditors, which takes place about a month after we file your petition. I can certainly give you a good idea whether I think the trustee will want that money, but if it’s a relatively small amount, the trustee may not even bother with it. As a a general rule, though, if there is more than a $1,000 for him to take, he probably will. Under $500 and you’re probably safe. Between $500 and $1,000 is a gray area and varies by trustee in Colorado.
If there is enough money for him to force you to turn over, you’ll have the chance to pay that over time. At the meeting of creditors, he’ll let us know what he thinks he’s entitled to. If there’s no dispute, we’ll come to agreement on when you’ll have to start paying.
Schedule A Free Consultation With A Denver, Colorado Bankruptcy Attorney
If you have questions about the bankruptcy process, we hope you’ll come in for a free consultation with an attorney. You can schedule a consultation by calling 303.331.3403 or by using our online scheduling system.
Colorado Bankruptcy Law Group, LLC
Our experienced Denver, Colorado bankruptcy attorneys will guide you safely through the bankruptcy process and put you on the road to a new financial start.
3773 Cherry Creek Drive North, #575