Are Bank Records Checked in Bankruptcy?

By Mary Jane Freeman

When you file for bankruptcy, the bankruptcy court will want to get an idea of your overall financial standing and circumstances. To do this, the court will look into your assets and liabilities, current monthly income and average monthly expenditures. To ensure the data it collects about you is accurate, you must provide the court with financial documentation, including bank records.

When you file for bankruptcy, the bankruptcy court will want to get an idea of your overall financial standing and circumstances. To do this, the court will look into your assets and liabilities, current monthly income and average monthly expenditures. To ensure the data it collects about you is accurate, you must provide the court with financial documentation, including bank records.

Types of Bankruptcy

Individuals typically file for either Chapter 7 or Chapter 13 bankruptcy. Also known as liquidation, Chapter 7 requires a debtor to give up all nonexempt assets to a bankruptcy trustee who then sells those assets, using the proceeds to pay off as many of the debtor's creditors as possible. In contrast, debtors who file for Chapter 13 bankruptcy don't give up anything. Instead, they enter into a repayment plan that lasts three to five years, paying as many creditors as possible. Any debts that remain unpaid at the end of liquidation or repayment plan are discharged and the debtor is no longer responsible for them.

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Financial Documentation

Regardless of the type of bankruptcy filed, the debtor must submit certain documents along with the bankruptcy petition. These include the following: a statement of financial affairs; schedules of assets, liabilities, income and expenditures; contracts; and unexpired leases and copies of tax returns. As part of the data collection process, debtors must provide the bankruptcy trustee with copies of all financial and bank account statements, usually for the past 60 days, or longer depending on the individual court's procedure. This means a debtor must turn over statements for checking, savings, money market, and retirement accounts, stocks and bond statements, credit card statements, and the like. Debtors are sometimes also required to provide these statements again at the Meeting of Creditors, or 341 meeting, held a few weeks after the bankruptcy filing. The financial documentation must reflect the balances held in each account on the date of the bankruptcy filing.

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Bankruptcy Laws and Codes for Idaho

References

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Pros & Cons of Filing Bankruptcy

Individual debtors frequently file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code, and either course can provide more pros than cons for certain debtors. To file under Chapter 7, you must meet certain income qualifications, but under Chapter 13, you must follow a repayment plan over three to five years. At the end of either type of bankruptcy, you may receive a discharge, or elimination, of certain remaining unpaid debts.

How Long to File Chapter 7 Bankruptcy If You Already Had One?

If you have previously filed for Chapter 7 bankruptcy, it is likely you will be entitled to file for a subsequent one. However, certain limitations affect who may refile and when. Typically, the waiting period is eight years between filings. If you previously filed but never received a discharge, the waiting period is typically much shorter.

Bankruptcy Documents Needed to Give to the Trustee

Filing a bankruptcy petition can be a nerve-wracking experience. Declaring bankruptcy can be scary, embarrassing and confusing. One of the most frightening parts of the process is the initial meeting of creditors, also referred to as the "341 meeting." Gathering all of the necessary documentation before the meeting helps put the debtor at ease and allows the meeting to go smoothly.

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