On the day we file bankruptcy, we try to keep your combined bank accounts below a total balance of about $300, because there is a good chance that the bk trustee will order you to turn over the money in your account on the date of filing. That means that if your payday is on a Friday, then we want to file bk on a Thursday when you don’t have much money left in your account.
Certain monies, retirement accounts in pensions, 401ks, and IRAs are generally protected in bankruptcy. You could have $50,000 in your 401k, and that can be exempted (protected) in bankruptcy. However, there are no good Utah exemptions for cash on hand (like money in the bank account).
There are various investment apps like Acorns and Stash, which allow you to put pennies or more into investment accounts. If the money is going into a 401k or IRA, it may be protected. However, most of these accounts are simply investment accounts with no retirement exemptions. In other words, if you have $500 in your Acorns account, you may have to turn that over the bk trustee after you file, because it is simply cash on hand.
And yes, the trustee can order you to cash out your investment app monies and turn the cash over to him.
Can you hide it?
First off, that’s bankruptcy fraud. Don’t commit fraud! Disclose all of your assets so that you can get a real discharge of your debts and get a fresh start.
Second, the bk trustee has been doing this much, much longer than you have, and he can smell a lie. When we meet with the bk trustee, he will ask for your bank statements for that last month, and sometimes for the last 6 months. Those bank statements will clearly disclose that you’ve been stashing money away like a chipmunk stashes acorns. (See what I did there with Stash and Acorns)?
What to do?
If you have investment accounts, tell your bankruptcy attorney before you file. He will help you figure out if you can protect them, if you should liquidate them, or if it’s not a big deal. But definitely don’t lie, and don’t try to hide anything.