Bank Statements And Bankruptcy

Some of our clients in the past have expressed some discomfort in providing bank statements. It may feel invasive to have an outside individual looking through transactions in your account. However, the bank statements are required documentation that trustees will review. Most of the time, our client’s minds are put at ease once they know what the trustee is really looking for.

As uncomfortable as that may feel, the trustees aren’t looking at your statements to judge how much money you spent at Starbucks in the last 60 days. They are looking for signs of other potential assets or income sources. They will also confirm that the balances in your bank accounts are listed accurately on the date of filing in your petition. The bank statements help tie the story that is told in your bankruptcy petition together.
A trustee will look to see if your income is coming from one or multiple sources. They can see if you have a side hustle or side source of business in your bank statements and tax returns. They will look to see if transfers in and out of your bank are tied to other accounts you have and make sure those accounts are also listed. They may have questions about unusual Venmo or Pay Pal transfers.

In addition, they are looking at potential assets that may or may not be disclosed. For example, is there an additional car payment being made on a car to a lender that may not have been listed. The bank statement can confirm that you have a mortgage or rent payment and that the figure listed in the petition is accurate. A trustee make ask for an explanation or clarification on any unusually large deposits or payments. They may look to see if there were any significant cash withdrawals from your accounts prior to filing.

As uncomfortable as it may be to have others review your statements it is a necessary step in the bankruptcy process. When you file bankruptcy, if you have concerns about certain transactions or patters, don’t be afraid to discuss those with your bankruptcy attorney before filing.

For more information, contact your Yuba City bankruptcy attorney at 530-797-4402.