Monthly Archives: January 2019

What happens to my Acorns (or Stash or other investment app money) account when I file for bankruptcy? Can I just not tell anyone about it?

What happens:

You probably lose it.  

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?

Probably not.

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.

 

 

 

Will the government shutdown delay my 2019 tax refund (I need it for bankruptcy)?

No, it will not.  Thank goodness!

In my bankruptcy practice, November – February are really rough because any time I meet a client with good tax refund coming, I tell him to wait.  My exact words in my heard are, “No, don’t pay me now.  I want to wait 4 months to see you again.  Dang it!”

If you file bankruptcy before you receive and spend that tax refund, you just may lose it.  This means that lots of clients with large families wait.  

This year, we have the current government shutdown with President Trump, the proposed border Wall with Mexico, and Democratic opposition to the same.  None of that affects your personal bankruptcy.  The IRS will still have employees process tax returns as of January 28, 2019.

Here is a link to a USA Today article that says the same thing:  https://www.usatoday.com/story/money/2019/01/08/government-shutdown-tax-refunds-filing-starts-jan-29/2511995002/

So file those tax returns on January 28, 2019, use the refund to pay for your bankruptcy, spend the rest on food storage, clothing, and necessary medical, and we can file your bankruptcy case and get you a fresh start.

Here is a link on what to do with your tax refund:  https://robertspaynelaw.com/myutahbankruptcyblog/2018/12/10/what-happens-to-my-2018-tax-refund-when-i-file-bankruptcy/