Of the many problems faced by consumer debtors, having bundles of cash lying around isn’t usually one of them.
Everyone has some cash, however, and most of us have its close cousin, bank accounts, and other similar liquid assets.
Bankruptcy trustees typically would love to get their hand on your cash and cash equivilents, because it is the easiest thing to take control of, and there are no storage or auction costs involved.
Fortunately for you, the federal bankruptcy exemptions for cash and bank accounts are quite generous. In a typical Chapter 7 case, debtors who do not own real estate (and those whose only house is “under water”) are able to accumulate and use a “wild card” expemption of approximately $11,000 to cover any asset they wish, including plain old cash. If a married couple files together, they can double that and save up to $22,000 despite the BK filing.
By Doug Beaton